Data Center Colocation Market Anticipated to Attain $202.71 Billion By 2030, at 15.7% CAGR

The growing need for cost-efficient, secure, reliable, scalable, and eco-friendly data centers drives global colocation market growth.

WILMINGTON, DE, UNITED STATES, July 2, 2025 /EINPresswire.com/ -- According to the report published by Allied Market Research, the global data center colocation market generated $46.08 billion in 2020, and is expected to garner $202.71 billion by 2030, witnessing a CAGR of 15.7% from 2021 to 2030. The report provides a detailed analysis of changing market dynamics, top segments, value chain, key investment pockets, regional scenario, and competitive landscape.

Demand for cost-effective IT operations, the requirement of security, reliability, and scalability of data center infrastructure, and rise in demand for eco-friendly data center colocation service drive the growth of the global data center colocation market. However, high initial and long-term leasing costs and network bandwidth issues hinder the market growth. On the other hand, increase in adoption of the hybrid cloud and virtualization and rise in investments to develop advanced data centers present new opportunities in the coming years.

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The concept of data center colocation has gained attraction nowadays due to the increasing need for additional data storage capacity to meet the requirements of internal and external IT services. In order to increase the existing data center capacity, the colocation data center has emerged as a lucrative option to enhance the business continuity. Many enterprises, especially small- and medium-sized enterprises, prefer using data center colocation services rather than investing huge capital in developing their own data centers. Colocation data center mainly requires operating expenses, thus, avoiding the upfront costs. Enterprises with local presence, in particular, have been following the trend of leasing space from colocation providers.

Covid-19 Scenario:

1. Many organizations adopted the “work from home” culture due to the shutdown of offices and manufacturing factories. This led to increase in usage of data center colocation facilities for accessibility and security of data.

2. In addition, education institutions began conducting online classes and examinations. This led to surge in utilization of data center colocation.

3. Service providers have been carrying out considerable investments in data center colocation facilities due to various factors such as the growth of over the top (OTT) market and increased traffic demand across the world.

The report offers detailed segmentation of the global data center colocation market based on type, enterprise size, industry vertical, and region.

On the basis of enterprise size, large-scale organization dominated the data center colocation market share and is expected to continue this growth during the forecast period. This growth is attributed to heavy investment of large scale organization in the data centers. Also, the growing requirement of heavy data storage in large-scale organizations drives the data center colocation market globally. However the small and medium scale organization recorded highest growing segment due to major shift of small and medium scale business toward digitization and adoption of internet of things in regular operation which creates the high amount of data, which drives the market globally.

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Based on type, the retail colocation segment accounted for the largest share in 2020, holding more than two-thirds of the total share, and is estimated to maintain its lead position during the forecast period. However, the wholesale colocation segment is expected to manifest the largest CAGR of 17.4% from 2021 to 2030.

Based on industry vertical, the IT and telecommunication segment contributed to the highest share in 2020, contributing to nearly one-fifth of the global data center colocation market, and is projected to continue its leadership status during the forecast period. However, the media & entertainment segment is estimated to witness the fastest CAGR of 20.0% from 2021 to 2030.

Based on region, North America accounted for the highest share in terms of revenue in 2020, contributing to nearly half of the total share, and is expected to maintain its dominance in terms of revenue by 2030. However, Asia-Pacific is projected to portray the highest CAGR of 19.3% during the forecast period.

Leading players of the global data center colocation market analyzed in the research include China Telecom Corporation Limited, CoreSite Realty Corporation, Cyrusone Inc., Cyxtera Technologies, Inc., Digital Realty Trust, Inc., Equinix, Inc., Global Switch, KDDI Corporation, and NTT Communications Corporation.

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Asia-Pacific is expected to exhibit highest growth during the forecast period, owing to strong economic growth along with the ongoing development in the IT and telecom sector, which drives organizations to invest heavily in data center colocation to sustain growth and improve productivity. In addition, factors such as major shift toward digital transformation, rise in cloud deployment and technological advancement among small & medium businesses, and ongoing modernization of data center and use of big data analytics in the organization drives heavy investment in data center colocation in emerging economies. Furthermore, enterprises in Asia-Pacific are focusing on enhancing their operations and increasing their overall efficiency to stay competitive in the market, which is expected to provide lucrative opportunities for the growth of the market during the forecast period.

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