Data Center Colocation Market Report 2026

Data Center Colocation Market Overview

• Data Center Colocation market size has reached to $78.01 billion in 2025 • Expected to grow to $163.08 billion in 2030 at a compound annual growth rate (CAGR) of 15.9% • Growth Driver: Cloud Adoption Boosts Data Center Colocation Demand • Market Trend: Data Center Colocation Market Witnesses Innovation Surge With Air-Assisted Liquid Cooling Technologies • North America was the largest region in 2025.

What Is Covered Under Data Center Colocation Market?

Data center colocation refers to a physical location that provides room with sufficient power, cooling, and security to house servers and computer hardware for enterprises. Anything from cabinets to cages to private apartments are included in this capacity. Data center colocation is a method of renting actual office space, network or internet bandwidth, and other services from an existing data center to third parties to set up their own data center. The main types of data center colocation are retail colocation and wholesale colocation. The retail colocation is a space where the consumer takes the space for lease that is within the data center such as rack space within the rack of caged-off area. The different sizes of enterprises include large enterprise and small scale enterprise. It is implemented in various verticals such as BFSI, IT and telecom, government and defense, healthcare, others.

What Is The Data Center Colocation Market Growth Forecast?

The data center colocation market size is expected to see rapid growth in the next few years. It will grow to $163.08 billion in 2030 at a compound annual growth rate (CAGR) of 15.9%. The growth in the forecast period can be attributed to cloud adoption growth, hyperscale demand spillover, sustainability regulations, edge computing expansion, need for low latency connectivity. Major trends in the forecast period include enterprise shift to colocation, high density rack deployment, energy efficient data center design, edge colocation expansion, interconnection focused facilities.

Global Data Center Colocation Market Segmentation

1) By Type: Retail Colocation, Wholesale Colocation 2) By Enterprise Size: Large Enterprise, Small Scale Enterprise 3) By End-User: BFSI, IT And Telecom, Government And Defense, Healthcare, Other End Users Subsegments: 1) By Retail Colocation: Single Cabinets, Half Cabinets, Full Cabinets, Caged Space, Custom Suites 2) By Wholesale Colocation: Private Data Center Suites, Dedicated Data Center Space, Large-Scale Colocation

What Is The Driver Of The Data Center Colocation Market?

The increasing demand for cloud adoption is expected to propel the growth of data center colocation market going forward. Cloud adoption refers to the process by which individuals, organizations, or businesses integrate and use cloud computing services and resources to enhance their IT capabilities and achieve specific objectives. Cloud adoption used in data center colocation to offer businesses a secure, reliable, and well-connected environment, enabling seamless integration, supporting hybrid deployments, and providing the scalability and flexibility required in dynamic business environments. For instance, in January 2025, according to AAG IT Services, a UK-based non-government organization, In 2022, 57% of SMB workloads and 56% of SMB data were hosted in public clouds, with an additional 6% of each expected to migrate to the cloud within the next 12 months. Consequently, by 2023, approximately 63% of SMB workloads and 62% of SMB data are projected to be cloud-hosted. Therefore, the increasing demand for cloud adoption is driving the growth of data center colocation industry.

Key Players In The Global Data Center Colocation Market

Major companies operating in the data center colocation market are AT&T Inc.; China Telecom Corporation Limited; NTT Ltd.; Element Critical; Global Switch Limited; Equinix Inc.; Iron Mountain Incorporated; Digital Realty Trust Inc.; Rackspace Technology Inc.; Zayo Group Holdings Inc.; CyrusOne Inc.; CoreSite Realty Corporation; Sungard AS; Cyxtera Technologies Inc.; Switch Ltd.; QTS Realty Trust Inc.; EdgeConneX Inc.; Aligned Energy LLC; Netrality Data Centers Inc.; Evoque Data Center Solutions; 365 Data Centers; Stream Data Centers; Compass Datacenters LLC; ServerFarm LLC; Digital Fortress Inc.; RagingWire Data Centers Inc.; DataBank Inc.; Sabey Data Centers LLC; Verizon Communications Inc.

Global Data Center Colocation Market Trends and Insights

Major companies operating in the data center colocation market are launching new technologies such as Air-Assisted Liquid Cooling (AALC) technologies to increase their profitability in the market. Air-Assisted Liquid Cooling (AALC) technologies in data center colocation refer to innovative cooling solutions designed to enhance the efficiency of managing heat generated by servers and other electronic components within a data center environment. For instance, in August 2023, Digital Realty, a US-based data center, colocation, and interconnection solutions provider launched a new high-density colocation service as part of its PlatformDIGITAL. This new service tackles data and AI challenges, offering customers an innovative solution to boost AI capabilities and extract value from their data. The high-density colocation services address challenges related to the rapid expansion of unstructured data and the use of artificial intelligence (AI). Available in 28 global markets, the service supports workloads of up to 70 kilowatts per rack, utilizing Air-Assisted Liquid Cooling technology. Responding to customer feedback, Digital Realty offers standardized configurations and ultra-high-power densities for swift deployment of high-performance infrastructure worldwide.

What Are Latest Mergers And Acquisitions In The Data Center Colocation Market?

In April 2025, Iron Mountain Incorporated, a U.S.-based public company, acquired Web Werks India Private Limited for approximately US $14,000 million. Through this acquisition, Iron Mountain Incorporated aims to expand its pan India digital infrastructure footprint, accelerate the deployment of hyperscale and AI ready data center capacity, and integrate Web Werks India Private Limited’s operations into its global network to serve cloud, enterprise, and edge customers more effectively. Web Werks India Private Limited is an India-based data center and cloud infrastructure company that provides data center colocation.

Regional Insights

North America was the largest region in the data center colocation market in 2025. The regions covered in this market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in this market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain

What Defines the Data Center Colocation Market?

The data center colocation market includes revenues earned by entities by providing bandwidth requirements while providing shared, secure spaces in cool, monitored environments that are ideal for servers. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

How is Market Value Defined and Measured?

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified). The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

What Key Data and Analysis Are Included in the Data Center Colocation Market Report 2026?

The data center colocation market research report is one of a series of new reports from The Business Research Company that provides market statistics, including industry global market size, regional shares, competitors with the market share, detailed market segments, market trends and opportunities, and any further data you may need to thrive in the data center colocation industry. The market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future state of the industry.