Data Center Colocation Market To Reach $165.45 Billion By 2030

Data Center Colocation Market Growth & Trends

The global data center colocation market size is anticipated to reach USD 165.45 billion in 2030 and is anticipated to grow at a CAGR of 16.0% from 2025 to 2030, according to a recent study by Grand View Research, Inc. Various CSPs and businesses are opting for multi-tenant or colocation data centers, which has been a significant factor driving the growth of the market. Colocation is among the most preferred choices among businesses, owing to cost benefits compared to building and managing a private data center facility. Moreover, a colocation data center offers better operational flexibility when scaling up infrastructure to accommodate large data volumes. Considering the increasing cost of property, land, and IT infrastructure, colocation data centers are the best options for SMEs owing to limited capital expenditure capability.

The increasing use of e-commerce shopping has been anticipated to drive market growth in the coming years. The data centers offer various benefits in the e-commerce industry, including better scalability, data reliability, enhanced security, improved customer experience, and reduced cost. The benefits offered by the data centers in the e-commerce industry have increased the IT expenditure of e-commerce companies. Moreover, opting for data center colocation would help in reducing costs when compared to setting up and maintaining a private data center, which smaller e-commerce companies are highly adopting. Thus, the growth of data center colocation in the e-commerce industry is expected to rise, thereby driving industry growth.

Several countries, such as the U.S., China, and India, have strict data location laws, preventing cross-border data transfer. The EU also implemented the GDPR in 2018, laying the foundation norms for personal data transfer and usage. Implementing such laws has resulted in the increased setting up of data centers within those countries and localized data storage. Furthermore, the colocation data centers offer businesses leasing spaces within data centers at reasonable costs, proximity to the business, and, the best part, the opportunity to scale up to accommodate larger data volumes. These aspects have contributed to the growth of the market and are expected to continue supporting this growth in the years to come.

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Data Center Colocation Market Report Highlights

• The retail colocation segment dominated the data center colocation industry and accounted for a revenue share of nearly 70.0% in 2024

• The tier 3 segment accounted for a largest revenue share of over 58.0% in 2024, driven by enterprises, cloud service providers (CSPs), financial institutions, and technology firms that require high reliability, scalability, and redundancy.

• The large enterprises segment accounted for a largest revenue share of over 49.0% in 2024

• The IT & telecom segment accounted for a largest revenue share of over 29.0% in 2024

• The data center colocation industry in North America held a largest share of 39.0% in 2024

Data Center Colocation Market Segmentation

Grand View Research has segmented the global data center colocation market report based on colocation type, tier level, enterprise size, end use, and region:

Data Center Colocation Type Outlook (Revenue, USD Billion, 2018 - 2030)

• Retail Colocation

• Wholesale Colocation 

Data Center Colocation Tier Level Outlook (Revenue, USD Billion, 2018 - 2030)

• Tier 1

• Tier 2

• Tier 3

• Tier 4

Data Center Colocation Enterprise Size Outlook (Revenue, USD Billion, 2018 - 2030)

• Large Enterprises

• SMEs

Data Center Colocation End Use Outlook (Revenue, USD Billion, 2018 - 2030)

• Retail

• BFSI

• IT & Telecom

• Healthcare

• Media & Entertainment

• Others

Data Center Colocation Regional Outlook (Revenue, USD Billion, 2018 - 2030)

• North America

  • U.S.

  • Canada

  • Mexico

• Europe

  • UK

  • Germany

  • France

• Asia Pacific

  • China

  • India

  • Japan

  • South Korea

  • Australia

• Latin America

  • Brazil

• Middle East & Africa

  • UAE

  • Saudi Arabia

  • South Africa

List of Key Players in the Data Center Colocation Market

• 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.