Data Center Colocation Market Growth, Size & Share 2028

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Data Center Colocation Market Forecast to 2028 - COVID-19 Impact and Global Analysis By Type (Retail and Wholesale), Enterprise size (SMEs and Large Enterprises), and Industry (IT & Telecom, BFSI, Healthcare, Retail, and Others)

Publication Month: Sep 2021 | Report Code: TIPTE100000210 | No. of Pages: 169 | Category: Technology, Media and Telecommunications | Status: Published

[Research Report] The data center colocation market is expected to grow from US$ 50,579.1 million in 2021 to US$ 136,647.9 million by 2028; it is estimated to grow at a CAGR of 15.3% from 2021 to 2028.

A colocation facility, often called a colo, is a data center where an enterprise can rent space for servers and other equipment; however, a data center colocation provider manages these servers and equipment. The colocation firms offer the building, power, cooling, bandwidth, and physical security. Enterprises can lease space by the cabinet, rack, cage, or room. Being one of the popular alternatives to traditional hosting, data center colocation facilities house multiple businesses (multitenant) that may only need one or two server racks. Moreover, unlike the data centers Colocation Market connected to the big-name cloud vendors such as Google, Amazon, and Microsoft, most colocation data centers are often located in big metropolitan areas. There are several reasons for the use of shared colocation facilities. For starters, the use of colocation data centers can minimize power and cooling expenses, and colocation providers get better deals from internet providers than a single company can handle. Colocation facilities offer power and internet connectivity, which supports in maximizing uptime. Moreover, colocation facility providers are better prepared for potential natural disasters and power outages than most typical enterprises.

Impact of COVID-19 Pandemic on Data Center Colocation Market

The COVID-19 pandemic has significantly impacted global economies with extensive lockdowns, which forced people to stay at home. As a result, the sustainability of data centers has become a growing concern for operators as they are widely known to consume a lot of resources. The COVID-19 outbreak has altered the data center construction in many regions. The opening of several new facilities was halted for three months, owing to the limited labor and disruptions in the supply of parts. This is hampering the growth of the data center colocation market in the present scenario. However, the strong presence of some leading providers delivering data centers colocation facilities such as Equinix; CenturyLink; and AT&T, Inc.; is significantly contributing to the market growth through the adoption of strategic collaborations, new product launches, and funding to the technological advancements.

Lucrative Regions for Data Center Colocation Providers

Lucrative Regions for Data Center Colocation Providers

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Data Center Colocation Market Insights
Advent of 5G Services to Surge Demand for Advanced Data Center Infrastructure
A modern colocation data center is a connectivity hub, facilitating customers to switch directly to the services they require over a single cross-connect or even with a quick and secure direct connection such as Microsoft’s Azure ExpressRoute. As the telecom operators are currently involved in rolling out the first wave of 5G services, data centers can support network service providers to extend their reach more rapidly through colocation services. Providing reliable 5G services is expected to require more data center infrastructure than several network service providers presently have at their disposal. With the continuous rise in internet usage, leading to greater data demands, data center colocation would emerge as a highly attractive and cost-effective solution for the telecommunications sector. Moreover, a significant number of companies cannot afford to expand their existing on-premises solutions or increase capacity by constructing a private data center. Through strategic collaborations with experienced data center colocation providers, they can gain all the benefits of a state-of-the-art facility without the need for substantial capital investments to build one. Thus, the emergence of 5G technology and its services is anticipated to propel the growth of the data center colocation market in the near future. On May 5, 2020, IBM announced new services and solutions to help enterprises and telecommunications companies speed up their transition to edge computing in the 5G era. The solution will help organizations across the globe to deal with the blazing speed and extremely low latency and transmission delays brought about by the rollout of wireless 5G telecommunications networks. The solutions also enable enterprises to reduce the complexity of managing workloads across various devices and help them quickly deliver edge-enabled services to customers. Clients across industries can leverage the benefits of edge computing, AI, and analytics to achieve organizational insights.

Industry-Based Market Insights

In terms of end user, the IT & Telecom segment accounted for the significant market share in the global data center colocation market. Data generated by large enterprises, an increase in smartphone applications, and the adoption of smart devices are primarily driving this segment. Speed, size, and efficiency are the essential elements that nowadays rule the IT industry. According to the GSM Association (GSMA), around 3.8 billion people used the mobile internet in 2019, up from 250 million in 2018. Because of the growing popularity of smartphones with complex features, this number is expected to rise. Increased adoption of smartphones, laptops, tablets, gaming consoles, and other gadgets for transferring data has created a need for additional data storage capacity. Datacenter colocation service providers offer various benefits to the IT industry such as the speed of deployment, waste and energy efficiency, and scalability. Meanwhile, the introduction of 5G is predicted to accelerate the growth of the IT and telecom sector, resulting in enormous data volumes and market expansion. Thus, the IT industry is adopting the data centers colocation for keeping pace in the highly competitive market.

Data Center Colocation Market, by Industry – 2020 and 2028 (%)  

Data Center Colocation Market, by Industry – 2020 and 2028 (%)  

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Strategic Insights

Report Coverage - Data Center Colocation Market
Report CoverageDetails
Market Size Value inUS$ 50,579.1 million in 2021
Market Size Value byUS$ 136,647.9 million by 2028
Growth rateCAGR of 15.3% from 2021-2028
Forecast Period2021-2028
Base Year2021
No. of Pages169
No. of Tables83
No. of Charts & Figures82
Historical data availableYes
Segments coveredType, Enterprise size and Industry
Regional scopeNorth America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country scopeUS, Canada, Mexico, UK, Germany, Spain, Italy, France, India, China, Japan, South Korea, Australia, UAE, Saudi Arabia, South Africa, Brazil, Argentina
Report coverageRevenue forecast, company ranking, competitive landscape, growth factors, and trends
Free Sample Copy Available

Players operating in the data center colocation market adopt strategies such as mergers, acquisitions, and market initiatives to maintain their positions in the market. A few developments by key players are listed below:

  • In July 2021, PEI-Genesis, a leading provider of the custom-engineered connector and cable connection solutions, expanded its European and African cooperation with global connector maker Positronic. The growth is the result of high demand from clients in these areas.
  • In June 2020, Global Switch—a leading owner, operator, and developer of large-scale, carrier and cloud neutral, multi-customer data centres in Europe and Asia Pacific—announced that building the first stage of a new data center in Amsterdam has begun in response to the increased demand.

The global data center colocation market has been segmented as follows:
Data Center Colocation Market – by Type

  • Retail
  • Wholesale

Data Center Colocation Market – by Enterprise size

  • SMEs
  • Large Enterprises

Data Center Colocation Market – by Industry

  • IT and Telecom
  • BFSI
  • Healthcare
  • Retail
  • Others 

Data Center Colocation Market – by Geography

  • North America

    • US
    • Canada
    • Mexico
  • Europe

    • Germany
    • France
    • Italy
    • UK
    • Russia
    • Rest of Europe
  • Asia Pacific (APAC)

    • Australia
    • China
    • India
    • Japan
    • South Korea
    • Rest of APAC
  • Middle East & Africa (MEA)

    • South Africa
    • Saudi Arabia
    • UAE
    • Rest of MEA
  • South America (SAM)

    • Brazil
    • Argentina
    • Rest of SAM

Company Profiles


  • Equinix Inc.
  • IBM Corporation
  • AT&T Inc.
  • Cyxtera Technologies, Inc.
  • Digital Realty Trust LP
  • CoreSite Realty Corporation
  • CyrusOne, Inc.
  • QTS Realty Trust, Inc.
  • 365 Data Centers
  • UnitedLayer

Frequently Asked Questions

Today, enterprises are switching to data center colocation providers for bandwidth, space, power, and value-added services (VAS), such as internet solutions, interconnection services, and skilled managed IT services depending upon their size and requirement. This, in turn, supports increasing business potential by reducing operational expenditure, thereby maximizing the ability to concentrate on the core business. North America and Europe are witnessing continuous adoption of cloud services, IoT, big data, and artificial intelligence (AI). The rising demand for cloud-based colocation services with the majority of the workforce shifting to remote working is propelling the growth of the data center colocation market.
The growth of edge computing significantly depends on the rapid adoption of devices enabled with the internet of things (IoT). The IoT edge devices have developed incredible applications across diverse industries with their capabilities to collect data beyond the reach of conventional networks and extend services with the use of cellular and Wi-Fi connections.
Based on type, the global data center colocation market is segmented into Retail, and Wholesale. The data center colocation market was dominated by the retail segment in 2020.
North America dominated the data center colocation market in 2020 with a share of more than 35% and is expected to continue its dominance by 2028. APAC is the second-largest contributor to the global data center colocation market in 2020, followed by Europe.
The major companies in data center colocation market are Equinix Inc.; IBM Corporation; AT&T Inc.; Cyxtera Technologies, Inc.; Digital Realty Trust LP; CoreSite Realty Corporation; CyrusOne, Inc.; QTS Realty Trust, Inc.; 365 Data Centers; and UnitedLayer.
The major end users in data center colocation includes IT and Telecom, BFSI, Healthcare, Retail, and Others. In terms of market share, the market was dominated by the IT and telecom segment in 2020.

The List of Companies - Data Center Colocation Market

  1. Equinix Inc.
  2. IBM Corporation
  3. AT&T Inc.
  4. Cyxtera Technologies, Inc.
  5. Digital Realty Trust LP
  6. CoreSite Realty Corporation
  7. CyrusOne, Inc.
  8. QTS Realty Trust, Inc.
  9. 365 Data Centers
  10. UnitedLayer


  • Save and reduce time carrying out entry-level research by identifying the growth, size, leading players and segments in the global data center colocation market.
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  • The key findings and recommendations highlight crucial progressive industry trends in the global data center colocation market, thereby allowing players across the value chain to develop effective long-term strategies.
  • Develop/modify business expansion plans by using substantial growth offering developed and emerging markets.
  • Scrutinize in-depth global market trends and outlook coupled with the factors driving the market, as well as those hindering it.
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