Data Center Colocation Market Advances with Modular Infrastructure Trends

The global data center colocation market size was estimated at USD 69.41 billion in 2024 and is projected to reach USD 165.45 billion by 2030, expanding at a CAGR of 16.0% from 2025 to 2030. As modern enterprises increasingly depend on digital operations, data centers have become essential for managing core business applications and supporting growing IT infrastructure needs.

Key Market Trends & Insights

• North America held the largest share of 39.0% in 2024.
• The U.S. market is expected to expand significantly at a CAGR of 14.9% from 2025 to 2030.
• By colocation type, retail colocation dominated with nearly 70.0% revenue share in 2024.
• By tier level, the Tier 3 segment accounted for over 58.0% revenue share in 2024.
• By enterprise size, large enterprises captured over 49.0% revenue share in 2024.

Market Size & Forecast

• 2024 Market Size: USD 69.41 Billion
• 2030 Projected Market Size: USD 165.45 Billion
• CAGR (2025–2030): 16.0%
• North America: Largest market in 2024

Growing reliance on data-driven operations continues to push organizations toward efficient and scalable IT solutions. The surge in cloud adoption, paired with the high capital costs of maintaining in-house data centers, has been a significant catalyst driving demand for colocation services. These facilities offer flexible, cost-effective alternatives, making them a preferred choice for businesses with dynamic data requirements.

The expanding use of cloud computing, IoT, autonomous vehicles, robotics, and advanced digital applications requires ultra-fast data processing and minimal latency. This is accelerating the deployment of colocation data centers, particularly as operators position facilities closer to end users. The rollout of 5G technology is expected to further stimulate colocation expansion due to increased demand for high-speed connectivity in remote and urban areas.

Cloud data center adoption is rising among both SMEs and large enterprises as organizations seek cost-efficient IT models that reduce the need for dedicated personnel and infrastructure investment. Major industry participants are strengthening their market presence through collaborations, acquisitions, product launches, and strategic partnerships.

The rise of 5G, AR/VR, and AI technologies has intensified the demand for greater bandwidth and faster data transfers. Colocation providers enable cloud platforms to deploy infrastructure close to their user base, ensuring high throughput and low latency. Although colocation involves shared resources and limited control over upgrades, its benefits — including scalability, redundancy, enhanced security, and improved connectivity — continue to fuel widespread adoption.

Order a free sample PDF of the Data Center Colocation Market Intelligence Study, published by Grand View Research.

Key Data Center Colocation Company Insights

Leading companies in this market include Equinix, Inc., Digital Realty Trust, China Telecom Corporation Limited, NTT Ltd., CyrusOne, and Telehouse. These firms are pursuing strategic initiatives to strengthen their competitive edge.

• September 2024: The U.S. Department of Homeland Security awarded Equinix, Inc. a major colocation services contract for its Homeland Security Enterprise Network, including power, connectivity, and O&M support.
• July 2024: Digital Realty Trust acquired a colocation facility in the Slough Trading Estate for USD 200 million, expanding its West London footprint and enhancing capabilities across key regions.

Key Data Center Colocation Companies

• China Telecom Corporation Limited
• Cologix
• Colt Technology Services Group Limited
• CoreSite
• CyrusOne
• Centersquare
• Digital Realty Trust
• Equinix, Inc.
• Flexential
• Iron Mountain, Inc.
• NTT Ltd. (NTT DATA)
• QTS Realty Trust, LLC
• Rackspace Technology
• Telehouse (KDDI CORPORATION)
• Zayo Group, LLC

Conclusion

The data center colocation market is experiencing rapid growth driven by the surge in digital transformation, cloud adoption, and the need for high-performance IT environments. As enterprises prioritize scalability, security, and cost efficiency, colocation facilities are becoming integral to modern IT strategies. Emerging technologies such as 5G, AI, AR/VR, and autonomous systems will further amplify the need for low-latency and high-bandwidth solutions, reinforcing the strong outlook for colocation services globally.

Explore Horizon Databook – The world’s most expansive market intelligence platform developed by Grand View Research.