The global data center colocation market is expected to grow at a CAGR of 15.08%, reaching a market size of USD 207.380 billion in 2030 from USD 102.729 billion in 2025.
The global data center colocation market is sure to witness rising growth, especially with the rise of internet usage worldwide. The global data center colocation market is also forecasted to rise as the demand for colocation in the healthcare industry has grown significantly worldwide. Furthermore, the rising incidents of cyber and phishing attacks across the globe can act as a major hindrance to market growth. The wholesale will attain a greater market share in the market's colocation model segment. In contrast, medium enterprises will grow significantly in the enterprise size category of the market.
A colocation facility is a type of facility that refers to renting out space in a data center. The colocation center allows companies to rent equipment, bandwidth, and space for computing services. The market for data centers is being driven by the increasing use of cloud services, which have taken a growing portion of data center usage. At the same time, colocation or in-house systems have maintained a somewhat constant supply.
As the increasing applications of 5G, wearable devices, the Internet of Things, and artificial intelligence continue to create a booming need for processing capacity, larger enterprises are looking to scale out their data centers to ensure the stability and dependability of data services. The trend is visible across the world. For instance, as per JLL, a global real estate firm, India's colocation data center industry is expected to double by the end of 2023.
The colocation of data centers is being fueled by as many public sector organizations as possible in India that use colocation services for their operations. For instance, in September 2022, Power Grid Corporation India Ltd and Tele India Datacenter, also known as "Datasamudra," India's first ON-DEMAND and ON-REQUIREMENT data center based in Bangalore, offering globally aligned colocation, hosting & cloud services, signed a Memorandum of Understanding to pool their resources to enhance user experience. Additionally, in May 2022, US colocation provider Cyxtera began offering colocation services in India owing to its strategic partnership with SifyTechnologies Limited.
One of the major driving factors for the global data center colocation market is estimated to be the expansion of global internet usage. With the expansion of global internet usage, data creation is forecasted to expand across the globe. The population of individuals using the internet worldwide has witnessed a massive increase, mainly with the introduction of new technologies like 5G, IoT, and AI, among others.
The International Telecommunication Union (ITU), in its global statistics, stated that in 2021, about 63% of the global population had access to the Internet, which was about 4.9 billion individuals. This number increased to about 5.1 billion, or about 64% of the total global population. The total number of individuals using the internet in the globe increased to about 5.4 billion, or about 67% of the total population.
Utilizing colocation services allows hospitals to concentrate more on providing services, such as patient care, medical research, and innovation, and less on managing data centers. The storage of electronically protected health information (ePHI) may be outsourced to colocation data centers, resulting in considerable financial savings for healthcare organizations wanting to expand their operations and research. To deliver high-quality patient care and abide by strict regulations and legislation, the healthcare industry needs total control and visibility over essential data, such as electronic medical records. Healthcare facilities must also provide uptime and availability to accept evolving technology. These factors contribute to the widespread use of private hosting in colocation facilities among enterprises operating in the healthcare industry. For instance, Wellstar Health Systems deployed Siemon's cutting-edge data center solutions to facilitate a successful expansion. Additionally, the considerable presence of colocation providers in developed economies like the Netherlands presents prospects for the industry during the projected period.
The growing risk of data breaches and cyber-attacks is estimated to hinder the global data center colocation market’s growth. With the increasing global cases of cyber attacks, data breaches, and phishing incidents, we have witnessed massive growth in recent times.
The IT Governance UK stated that in 2023, the globe witnessed about 8.214 billion record breaches caused by data breaches and cyber-attacks. The agency further stated that in 2023, about 3.8 billion records were breached by DarkBeam, a UK-based organization. In contrast, about 1.523 billion cases of record breaches were recorded on the Real Estate Wealth Network of the USA. The Indian Council of Medical Research (ICMR) recorded a breach of about 815 million records, whereas Kazakhstan's Kid Security witnessed a record breach of about 300 million.
The data center colocation market has been classified by geography into North America, South America, Europe, the Middle East and Africa (MEA), and the Asia Pacific. The number of data centers in various states across the US provides valuable insights into the data center colocation market growth. The concentration of data centers in specific states signifies a robust industry within those regions. With 239 data centers, California stands out as a prominent hub for data center infrastructure. Texas follows closely with 185 data centers, indicating a substantial presence within the state. Florida, New York, and Virginia also exhibit many data centers, with 113, 106, and 100, respectively. These figures suggest a growing demand for data center infrastructure and indicate potential opportunities for colocation services. The states with higher numbers of data centers may present a favorable market for colocation providers, as businesses in those regions seek to outsource their data center needs to specialized facilities. Additionally, the concentration of data centers in certain states, such as Virginia's Ashburn area, signifies a thriving ecosystem for data centers, further promoting the growth of the data center colocation market in the US.
| Report Metric | Details |
| Data Center Colocation Market Size in 2025 | USD 102.729 billion |
| Data Center Colocation Market Size in 2030 | USD 207.380 billion |
| Growth Rate | CAGR of 15.08% |
| Study Period | 2020 to 2030 |
| Historical Data | 2020 to 2023 |
| Base Year | 2024 |
| Forecast Period | 2025 – 2030 |
| Forecast Unit (Value) | USD Billion |
| Segmentation |
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| Geographical Segmentation | North America, South America, Europe, Middle East and Africa, Asia Pacific |
| List of Major Companies in the Data Center Colocation Market |
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| Customization Scope | Free report customization with purchase |