Data Center Colocation Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023 - 2028)

The Data Center Colocation Market is segmented by Solution Type (Wholesale Colocation, Retail Colocation), Size of the Organization (Small and Medium Enterprises​, Large Enterprises), ​End-user Vertical (BFSI, Manufacturing, IT and Telecommunications, Healthcare & Lifesciences, Government, Entertainment and Media), and Geography (North America, Asia-Pacific, Europe, Latin America, and Middle East and Africa). The market sizes and forecasts are provided in terms of value (USD million) for all the above segments.

Data Center Colocation Market Size

Data Center Colocation Market Summary
Study Period: 2018 - 2028
Fastest Growing Market: Asia Pacific
Largest Market: North America
CAGR: 10.92 %

Major Players

Data Center Colocation Market Major Players

*Disclaimer: Major Players sorted in no particular order


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Data Center Colocation Market Analysis

The Data Center Colocation market is expected to register a CAGR of 10.92% over the forecast period. Organizations are turning into colocation data centers to expand their network's reach and capabilities. Data centers have the computing tools to adapt to huge data analytics workloads, particularly in software-defined data centers (SDDCs), which may offer scalable virtualized server options at a low price. Further, the trends towards colocation products that seamlessly integrate hyperscale and edge data centers to support new applications for AI, the Internet of Things, autonomous vehicles, big data, etc., significantly cater to the market growth.

  • The growing adoption of cloud services drives the market. Over the past five years, cloud services have supplied an increasing share of data-center use, while the supply by colocation or in-house systems has remained roughly steady by comparison.
  • Further various state governments are also supporting colocation data centers to set up their facilities and giving their lands for the infrastructure. For example, A Memorandum of Understanding (MoU) between Equinix and Tamil Nadu's government in southern India has been signed. The purpose of the MoU is to facilitate and promote the colocation company's forthcoming project in the Chennai suburb of Siruseri.
  • In addition, the company paid USD 9 million for a 5.5-acre plot of property in the State Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT) IT Park. In the location, Equinix plans to build a 24MW data center. Over the next ten years, the corporation expects to make phases of investments totaling more than INR 1,000 crores (USD 120 Million).
  • Further, the pandemic has led to a new wave of digital transformation in various sectors across the country. Businesses in the country are rapidly turning to third-party colocation facilities for their data center operations, further complemented by an increased shift towards a hybrid IT approach – leveraging the combined capabilities of hosted data centers and multi-cloud setups.
  • Additionally, due to the Covid-19 pandemic, colocation has become a more important part of staying connected, collaborating, and moving forward cost-effectively and safely. Healthcare is utilizing data to study patient outcomes and artificial intelligence to project the spread of disease.

Data Center Colocation Industry Segmentation

Colocation is a data center facility where a corporation and enterprise can rent space for servers and other computing hardware. It is used in wholesale and retail colocation in industries like BFSI, manufacturing, and energy.

The Data Center Colocation Market is segmented by Solution Type (Wholesale Colocation, Retail Colocation), Size of the Organization (Small and Medium Enterprises​, Large Enterprises), ​End-user Vertical (BFSI, Manufacturing, IT and Telecommunications, Healthcare & Lifesciences, Government, Entertainment and Media), and Geography (North America, Asia-Pacific, Europe, Latin America, and Middle East and Africa).

The market sizes and forecasts are provided in terms of value (USD million) for all the above segments.

Solution Type
Wholesale Colocation
Retail Colocation
Organization Size
Small and Medium Enterprises
Large Enterprises
End-user Vertical
Banking and Financial Services
IT and Telecom
Healthcare & Lifesciences
Entertainment and Media
Other End-user Verticals
North America
United States
United Kingdom
Rest of Europe
Asia Pacific
Rest of Asia Pacific
Latin America
Middle East and Africa

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Data Center Colocation Market Trends

This section covers the major market trends shaping the Data Center Colocation Market according to our research experts:

Healthcare Sector Accounts for Significant Share

  • The demand for colocation is significantly increasing with the increasing rate of digital technology in the healthcare sector. The healthcare industry generates enormous amounts of data. Many healthcare departments are collecting data from their clinical trials and several outpatient records to derive a meaningful analysis. However, most hospitals involved in such data collection need to be equipped with relevant infrastructure.​
  • Healthcare facilities use colocation data centers to streamline how they handle and store data, including medical records, medications, and anything in between, as a result of technology moving to the cloud. Healthcare facilities can take advantage of additional space and the capacity required to fulfill their expanding data storage demands by outsourcing data storage to a data center colocation service provider. In accordance with their current needs for data storage, healthcare organizations can upgrade or lower their bandwidth using colocation. Healthcare providers can keep medical security data without being concerned about space thanks to this economical technique. In addition, the healthcare center incurs no maintenance costs.
  • The healthcare sector needs complete control and visibility over vital data, such as electronic medical records, to provide high-quality patient care and adhere to stringent standards and laws. In order to accommodate developing technologies, healthcare centers must also ensure uptime and availability. For these reasons, many people working in the healthcare sector are using private hosting in colocation facilities. For instance, Wellstar Health Systems stated that they used advanced data center solutions from Siemon to enable a productive expansion. Moreover, the significant presence of colocation providers in developed economies such as the Netherlands, as indicated in the graph, could also create opportunities for the market during the forecast period.
  • Furthermore, players such as Iron Mountain healthcare data center services offer support to hospitals, insurance, pharma, biotech, and other HIPAA-regulated industries. Their colocation facilities are built to support healthcare requirements. The Iron Mountain healthcare data center compliance support includes HIPAA, FISMA High, ISO 27001, PCI-DSS 3.1, and SOC 2 Type II, augmenting the existing framework of over 225,000 Iron Mountain customers.
Data Center Colocation Market - Colocation Providers, The Netherlands

The Asia-Pacific to Witness Significant Growth Rate

  • The Asia-Pacific is a major hub for IT outsourcing destinations for the various prominent players. Power, space, and IP transit cost more in-country China, which emphasizes the difficulties in maintaining the data center.
  • Larger businesses are looking to scale up their data centers to ensure the stability and reliability of data services as the application of 5G, wearable devices, the internet of things, and artificial intelligence spur a burgeoning demand for computing power. China is highly focused on leading over global peers in data center construction. It is anticipated that increasing demand from businesses will fuel the growth of the nation's cloud computing and other related data services. The main drivers of China's growth are also advancements in data center technology and its integration with other benefits.
  • Further, According to JLL, a multinational real estate company, India's colocation data center (DC) market is predicted to grow twofold by 2023. The company said that the capacity would be increased from 499 MW of IT load in 2021 to 1008 MW in the current year.
  • In India, various public sector organizations are also opting for colocation services in their business which is driving the colocation of data centers. For example, in September 2022, Power Grid Corporation India Ltd and Tele India Datacenter, also known as "Datasamudra," India's first ON-DEMAND and ON-REQUIREMENT data center based in Bangalore, offering globally aligned colocation, hosting & cloud services have signed a Memorandum of Understanding to combine their resources in order to improve user experience.
  • In May 2022, through a strategic relationship with SifyTechnologies Limited, US colocation company Cyxtera announced it would start providing colocation services in India. In Mumbai, Noida, Chennai, Hyderabad, and Kolkata, Sify has ten data centers totaling over 70MW. Cyxtera has 61 data centers operating in 28 markets.
  • A new data center for CtrlShas begun construction in Hyderabad, India, with a capacity for 1,600 racks in the 18MW facility, which will be 131,000 square feet (12,170 sqm) in size. This will facilitate the entry of Indian and multinational corporations into Hyderabad for colocation or disaster recovery. The facility will be LEED Platinum certified and TIA-942 Rated-4 compliant. It will have features for collecting rainwater, conserving water, and recycling. CtrlSpresently runs more than 1 million square feet of facilities in Mumbai, Hyderabad, Noida, and Bangalore.
Data Center Colocation Market - Growth Rate by Region

Data Center Colocation Industry Overview

The data center colocation market needs to be more cohesive, owing to the many players in the market. Some of the predominant players in the market are NTT Communications, Digital Realty Trust Inc., and Equinix, among others. Further, with intense competition, many market players use various strategies to stay ahead of the competition, such as partnerships and development, to increase their market penetration and strengthen their market position. Recent developments are -

In December 2022, T4 Group, Australia's largest IT provider, announced a lead collaboration with NTT Ltd, a prominent global technology services firm, to offer its NZ data center infrastructure as it continues to drive the way in New Zealand data centers. T4 Group provides regional New Zealanders with access to colocation data centers that are reliable, secure, and profitable. T4 Group now operates two data centers in Whangarei and Auckland, while a third is currently being built in Southland.

In May 2022, a strategic partnership between Cyxtera, a collocation service provider, and SifyTechnologies Limited was signed, which enables the start of colocation solutions in India. Customers in five more markets in India can now use colocation services from Cyxtera.

Data Center Colocation Market Leaders

  1. NTT Communications​

  2. Equinix, Inc.

  3. Cyxtera Technologies

  4. CyrusOne

  5. Digital Realty Trust, Inc.​

*Disclaimer: Major Players sorted in no particular order

Data Center Colocation Market Concentration

Data Center Colocation Market News

  • December 2022: Equinix, Inc., one of the prominent digital infrastructure firms, announced plans to enter the South African market with a USD160 million data center investment in South Africa, expanding its current foothold on the African continent in Nigeria, Ghana, and Côte d'Ivoire. In 2024, the new data center is anticipated to open. JN1, a new 4.0 MW data center, will offer more than 20,000 gross square feet of colocation space and 690+ cabinets.
  • October 2022: NTT announced that its newest colocation data center would open in Johannesburg, South Africa. The Johannesburg 1 Data Center, a part of NTT's expansion into Africa, will be fully built and will cover 6,000m2 of IT space with a 12MW capacity.

Data Center Colocation Market Report - Table of Contents


    1. 1.1 Study Assumptions and Market Definition​

    2. 1.2 Scope of the Study​




    1. 4.1 Market Overview

    2. 4.2 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.2.1 Bargaining Power of Suppliers

      2. 4.2.2 Bargaining Power of Buyers

      3. 4.2.3 Threat of New Entrants

      4. 4.2.4 Threat of Substitutes

      5. 4.2.5 Intensity of Competitive Rivalry

    3. 4.3 Industry Value Chain Analysis

    4. 4.4 Impact of COVID-19 on Data center Colocation Industry

    5. 4.5 Analysis of Key Investments Made by Colocation Providers in Hyperscale Data Centers


    1. 5.1 Market Drivers

      1. 5.1.1 Higher Anticipated Growth in Wholesale Datacenter Colocation Spaces to Propel Demand

      2. 5.1.2 Increased Emphasis on Compliance With Data Regulations and Cost-Effective Nature of Colocation Facilities to Drive Adoption Among SME

    2. 5.2 Market Challenges

      1. 5.2.1 Dependence on Regulatory Landscape & Stringent Security Requirements to Pose a Challenge for Operators


    1. 6.1 Solution Type

      1. 6.1.1 Wholesale Colocation

      2. 6.1.2 Retail Colocation

    2. 6.2 Organization Size

      1. 6.2.1 Small and Medium Enterprises

      2. 6.2.2 Large Enterprises

    3. 6.3 End-user Vertical

      1. 6.3.1 Banking and Financial Services

      2. 6.3.2 Manufacturing

      3. 6.3.3 IT and Telecom

      4. 6.3.4 Healthcare & Lifesciences

      5. 6.3.5 Government

      6. 6.3.6 Entertainment and Media

      7. 6.3.7 Other End-user Verticals

    4. 6.4 Geography

      1. 6.4.1 North America

        1. United States

        2. Canada

      2. 6.4.2 Europe

        1. Germany

        2. United Kingdom

        3. France

        4. Spain

        5. Nordics

        6. Rest of Europe

      3. 6.4.3 Asia Pacific

        1. China

        2. Japan

        3. India

        4. Singapore

        5. Rest of Asia Pacific

      4. 6.4.4 Latin America

      5. 6.4.5 Middle East and Africa


    1. 7.1 Company Profiles

      1. 7.1.1 Digital Reality Trust, Inc.

      2. 7.1.2 NTT Communications

      3. 7.1.3 Equinix, Inc.

      4. 7.1.4 Cyxtera Technologies

      5. 7.1.5 CyrusOne, Inc.

      6. 7.1.6 China Telecom Corporation Limited

      7. 7.1.7 British Telecommunications PLC

      8. 7.1.8 Global Switch

      9. 7.1.9 Coresite Reality Corporation

      10. 7.1.10 Interxion Holding NV

      11. 7.1.11 Atman

      12. 7.1.12 Bell Canada

      13. 7.1.13 China Unicom

      14. 7.1.14 CenturyLink, Inc.

      15. 7.1.15 Quality Technology Services

      16. 7.1.16 Singtel (Singapore Telecommunications Limited)

      17. 7.1.17 Telefonica, S.A.

      18. 7.1.18 KDDI Corporation

      19. 7.1.19 Keppel DC

      20. 7.1.20 GDS Holding Limited

      21. 7.1.21 OneAsia Network

      22. 7.1.22 PT Telekom Group

    2. *List Not Exhaustive


**Subject to Availability
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Data Center Colocation Market Research FAQs

The Data Center Colocation Market market is studied from 2018 - 2028.

The Data Center Colocation Market is growing at a CAGR of 10.92% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2022.

NTT Communications​, Equinix, Inc., Cyxtera Technologies, CyrusOne, Digital Realty Trust, Inc.​ are the major companies operating in Data Center Colocation Market.

Data Center Colocation Industry Report

Statistics for the 2023 Data Center Colocation market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Data Center Colocation analysis includes a market forecast outlook to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.

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