Global Data Center Colocation Market Size Study & Forecast, by Colocation Type (Retail and Wholesale), Enterprise Size, Tier Level (Tier 1 and Tier 2), End Use (BFSI and Retail), and Regional Forecasts 2025-2035

The Global Data Center Colocation Market is valued at approximately USD 69.41 billion in 2024 and is anticipated to grow at a CAGR of 16.00% over the forecast period 2025-2035, reaching nearly USD 355.19 billion by 2035. Data center colocation, at its core, is the practice through which businesses lease physical space, power, cooling, and security for their IT infrastructure in third-party data centers rather than investing in building their own. This strategy enables companies to enhance scalability, optimize costs, and deploy mission-critical workloads faster while ensuring robust network connectivity. The market expansion is being fueled by the exponential growth in data traffic, increasing demand for cloud-based services, rising digital transformation initiatives across industries, and the global surge in e-commerce platforms. Furthermore, as enterprises look to strengthen business continuity planning and reduce latency for users, colocation facilities have become a central pillar of IT strategies.

The demand for colocation is being further propelled by the growing need for hybrid IT models, which combine on-premises, cloud, and colocation deployments. Enterprises worldwide are realizing that leasing infrastructure helps them redirect capital towards innovation rather than construction. According to various industry sources, over 60% of global enterprises are expected to rely on colocation for at least part of their IT workloads by the end of this decade. Additionally, increasing cybersecurity concerns, stringent data localization regulations, and the rise of AI and IoT applications have intensified the demand for highly reliable and secure colocation facilities. Nevertheless, high initial costs and significant energy requirements remain challenges for the industry, although advances in green data centers and renewable energy integration are beginning to address these concerns.

The detailed segments and sub-segments included in the report are:

By Colocation Type:
• Retail
• Wholesale

By Enterprise Size:
• Small and Medium Enterprises (SMEs)
• Large Enterprises

By Tier Level:
• Tier 1
• Tier 2

By End Use:
• BFSI
• Retail

By Region:

North America
• U.S.
• Canada

Europe
• UK
• Germany
• France
• Spain
• Italy
• ROE

Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• RoAPAC

Latin America
• Brazil
• Mexico

Middle East & Africa
• UAE
• Saudi Arabia
• South Africa
• Rest of Middle East & Africa

Retail colocation is expected to dominate the market, capturing the largest market share during the forecast period. This dominance is attributed to the increasing preference of small and medium enterprises for renting smaller racks and cages rather than wholesale facilities, as it provides them with flexibility, reduced upfront investment, and enhanced scalability. The segment’s growth is also supported by the ongoing digitization of SMEs and their reliance on outsourcing IT infrastructure management, which allows them to focus resources on customer acquisition and product innovation. Meanwhile, wholesale colocation, although smaller today, is projected to grow rapidly as hyperscale cloud providers and multinational corporations demand larger spaces to handle extensive computing workloads.

Currently, large enterprises lead the market’s revenue contribution due to their massive data generation and growing reliance on colocation services to achieve operational agility. Large-scale organizations, particularly in sectors like BFSI and e-commerce, are increasingly leasing space in wholesale colocation centers to manage surging volumes of customer transactions and ensure uninterrupted uptime. However, SMEs are emerging as the fastest-growing segment, driven by the widespread adoption of cloud-native applications and the push for cost-efficient IT strategies that avoid building proprietary data centers. This dual scenario highlights a balanced landscape—large enterprises dominating revenues, while SMEs accelerate growth with rising digital-first adoption.

The key regions considered for the Global Data Center Colocation Market study include North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. North America currently dominates the global market due to the presence of leading colocation providers, robust digital infrastructure, heavy penetration of cloud services, and the proliferation of hyperscale data centers across the United States and Canada. Meanwhile, Asia Pacific is anticipated to witness the fastest growth throughout the forecast horizon. Rapid industrialization, surging demand for digital services from markets like China and India, supportive government policies encouraging data localization, and growing investments in smart city projects are expected to drive regional growth. Europe is also emerging as a crucial market, particularly with the enforcement of stringent data protection laws like GDPR, which encourages enterprises to rely on secure colocation facilities.

Major market players included in this report are:
• Equinix, Inc.
• Digital Realty Trust, Inc.
• NTT Global Data Centers
• CyrusOne, Inc.
• China Telecom Corporation Limited
• Global Switch Holdings Limited
• Telehouse (KDDI Corporation)
• CoreSite Realty Corporation
• AT&T Inc.
• Iron Mountain Incorporated
• Rackspace Technology, Inc.
• Verizon Communications Inc.
• CenturyLink, Inc. (Lumen Technologies)
• Compass Datacenters, LLC
• Colt Data Centre Services

Global Data Center Colocation Market Report Scope:
• Historical Data – 2023, 2024
• Base Year for Estimation – 2024
• Forecast period - 2025-2035
• Report Coverage - Revenue forecast, Company Ranking, Competitive Landscape, Growth factors, and Trends
• Regional Scope - North America; Europe; Asia Pacific; Latin America; Middle East & Africa

The objective of the study is to define market sizes of different segments & countries in recent years and to forecast the values for the coming years. The report is designed to incorporate both qualitative and quantitative aspects of the industry within the countries involved in the study. The report also provides detailed information about crucial aspects, such as driving factors and challenges, which will define the future growth of the market. Additionally, it incorporates potential opportunities in micro-markets for stakeholders to invest, along with a detailed analysis of the competitive landscape and product offerings of key players. The detailed segments and sub-segments of the market are explained below:

Key Takeaways:
• Market Estimates & Forecast for 10 years from 2025 to 2035.
• Annualized revenues and regional-level analysis for each market segment.
• Detailed analysis of the geographical landscape with country-level analysis of major regions.
• Competitive landscape with information on major players in the market.
• Analysis of key business strategies and recommendations on future market approach.
• Analysis of the competitive structure of the market.
• Demand side and supply side analysis of the market.

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