Home > > IT And Telecommunications > > Data Center Colocation Market Size, Share, Scope & Forecast Report - 2032
ID : CBI_1530 | Updated on : | Author : Amit Sati | Category : IT And Telecommunications
Data Center Colocation Market size is estimated to reach over USD 211.04 Billion by 2032 from a value of USD 66.36 Billion in 2024 and is projected to grow by USD 75.50 Billion in 2025, growing at a CAGR of 13.7% from 2025 to 2032.
Data center colocation refers to the practice where businesses lease space within a shared data center to host their servers and other IT equipment. Instead of owning and maintaining their own physical infrastructure, colocation allows companies to rent space, including rack space, cabinet space, or even an entire room, within a data center facility. This shared infrastructure provides power, cooling, bandwidth, and physical security.
Data center colocation plays a crucial role in enabling digital transformation by providing businesses with access to flexible, scalable, and reliable infrastructure. It allows companies to outsource their IT infrastructure needs, including power, cooling, and physical space, while maintaining control over their data and applications. This flexibility and scalability are essential for meeting the demands of digital transformation, which often involves rapid growth, changing business needs, and evolving technologies.
Thus, the market analysis depicts that the aforementioned factors are boosting the data center colocation market growth.
Data center colocation, while offering cost savings and other benefits, leads to latency issues due to factors like distance and network congestion. Latency refers to the delay experienced when sending data from one point to another and back again. Lower latency means faster response times. When colocation facilities are located far from users, data has to travel longer distances, increasing latency. Network congestion, especially during peak hours, further worsens latency.
Thus, the market analysis shows that the aforementioned factors are hindering the data center colocation market demand.
Edge colocation combines the colocation model with the benefits of edge computing. It enables businesses to deploy their own hardware in a colocation data center while leveraging the proximity of edge data centers for faster content delivery and lower latency. This is particularly beneficial for applications that require real-time data processing, such as smart cities, autonomous vehicles, and online gaming.
Thus, the ongoing advancements in edge colocation are expected to boost the data center colocation market opportunities in the upcoming years.
Based on type, the market is segmented into retail colocation and wholesale colocation.
Trends in the Type:
Retail colocation segment accounted for the largest revenue of the total data center colocation market share in 2024.
Wholesale colocation segment is anticipated to register the fastest CAGR during the forecast period.
Based on enterprise size, the market is segmented into small and medium-sized enterprises (SMEs) and large enterprises.
Trends in the Enterprise Size:
Large enterprises segment accounted for the largest revenue of the overall data center colocation market share in 2024.
Small and medium-sized enterprise (SMEs) are anticipated to register the fastest CAGR during the forecast period.
Based on industry vertical, the market is segmented into BFSI, IT & telecom, healthcare, government and defense, energy, retail, manufacturing, media and entertainment, and others.
Trends in the Industry Vertical:
IT & telecom segment accounted for the largest revenue share of 28.09% in the market in 2024.
The healthcare segment is anticipated to register the fastest CAGR during the forecast period.
The regions covered are North America, Europe, Asia Pacific, the Middle East and Africa, and Latin America.
Asia Pacific region was valued at USD 17.65 Billion in 2024. Moreover, it is projected to grow by USD 20.14 Billion in 2025 and reach over USD 58.25 Billion by 2032. Out of this, China accounted for the maximum revenue share of 32.50%. The market in the region is growing due to rising digital transformation, usage of AI capabilities, deployment of 5G services, and others. Moreover, rising demand for data center space and computing power is also boosting the data center colocation market expansion.
North America is estimated to reach over USD 76.61 Billion by 2032 from a value of USD 24.21 Billion in 2024 and is projected to grow by USD 27.53 Billion in 2025. The market in the region is growing due to well-established IT & telecommunication, healthcare, and BFSI industries that require data centers for storing, processing, and distributing data and applications.
Additionally, the European market growth is driven due to rising cloud computing adoption, increasing data consumption, and the rise of technologies like 5G and edge computing among others. The data center colocation market analysis in Latin America, the Middle East, and Africa shows that the market growth in these regions is driven due to factors such as increased internet penetration, digital transformation, and the need for data sovereignty.
The data center colocation industry is highly competitive with major players providing services to the national and international markets. Key players are adopting several strategies in research and development (R&D), product innovation, and end-user launches to hold a strong position in the global data center colocation market. Key players in the data center colocation industry include-
Mergers & Acquisitions:
Report Attributes | Report Details |
Study Timeline | 2019-2032 |
Market Size in 2032 | USD 211.04 Billion |
CAGR (2025-2032) | 13.7% |
By Type |
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By Enterprise Size |
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By Industry Vertical |
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By Region |
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Key Players |
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North America | U.S. Canada Mexico |
Europe | U.K. Germany France Spain Italy Russia Benelux Rest of Europe |
APAC | China South Korea Japan India Australia ASEAN Rest of Asia-Pacific |
Middle East and Africa | GCC Turkey South Africa Rest of MEA |
LATAM | Brazil Argentina Chile Rest of LATAM |
Report Coverage |
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Data Center Colocation Market size is estimated to reach over USD 211.04 Billion by 2032 from a value of USD 66.36 Billion in 2024 and is projected to grow by USD 75.50 Billion in 2025, growing at a CAGR of 13.7% from 2025 to 2032.
The data center colocation market report includes specific segmentation details for type, enterprise size, industry vertical, and region.
Asia Pacific region is expected to register the fastest growth during the forecast period.
The key participants in the data center colocation market are Equinix, Inc. (USA), Digital Realty Trust (USA), China Telecom Corporation Limited (China), CyrusOne (USA), CoreSite (USA), NTT Communications Corporation (Japan), Global Switch (UK), KDDI Corporation (Japan), AT&T Intellectual Property (USA), and Telehouse (Japan).