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The US Data Center Colocation Market Investment to Hit $11.54 Billion in 2028 - Arizton

U.S. Data Center Colocation Market Research Report by Arizton

U.S. Data Center Colocation Market Research Report by Arizton

According to Arizton's latest research report, the US data center colocation market will grow at a CAGR of 6.70% during 2022-2028.

The study considers the present scenario of the U.S. data center colocation market and its market dynamics for 2023-2028. It covers a detailed overview of several market growth enablers, restraints, and trends. The report offers both the demand and supply aspects of the market. It profiles and examines leading and prominent companies operating in the market.

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Many data center investments are witnessed in the US, driven by the deployment of 5G, technological advances, the adoption of Big data and IoT, digitalization, and the development of smart cities. The Southeastern region, particularly North Virginia, is considered the global data center capital, hosting a high concentration of facilities. Virginia, Texas, California, and Georgia are the top states attracting investments from global operators. In Arizona, businesses in FTZs can receive significant tax reductions. The Northeastern region faces space constraints for data center development, leading to expansions in large-scale colocation facilities. Salt Lake City experiences significant demand from the IT, cloud, entertainment, media, and retail sectors, while Chicago experiences rapid growth and is expected to continue expanding. The US data center colocation market is expected to see the entry of new players. In 2022, notable newcomers, such as AUBix, Edge Centres, Corscale Data Centers, Yondr, and Quantum Loophole, entered the market. However, these newcomers will face competition from both local and established global players in the market.

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In the realm of data centers, there is a growing expectation to adopt innovative designs such as district heating, particularly in states with colder climates. Additionally, the success of research projects like underwater data centers and floating data centers is anticipated to significantly impact market growth, both toward the end of the forecast period and beyond. However, the commercial implementation of these innovations is likely to progress slower. One notable focus of vendors' innovations revolves around reducing water consumption in cooling systems. Consequently, many data center operators are now acquiring water-less cooling systems for their facilities across different countries. The market for liquid immersion and direct-liquid cooling solutions experiences robust growth, driven by the increased deployment of AI and ML workloads during the forecast period. Data center racks with a heat density exceeding 30 kW necessitate direct-liquid cooling. In response to this demand, the market witnesses numerous innovations, with liquid immersion and direct-liquid cooling vendors collaborating with IT infrastructure providers to develop cutting-edge solutions targeting a PUE of less than 1.1. Moreover, the market witnesses the entry of vendors into developing countries, with a particular focus on clients operating AI and ML workloads.

Competitive Landscape

Investments from local and global colocation operators drive significant US data center colocation market growth. In 2022, Southeastern US, Midwestern US, and Southwestern US were among the top regions that witnessed the highest investment by the colocation operators. The trend is expected to continue in the upcoming years.

Operators are more likely to be attracted to a state that offers several tax incentives, has proper connectivity, supports favorable climatic conditions, and has the availability of renewable energy.

The entrance of global companies into the US occurs through the acquisition of local data center companies. This trend is likely to attract investments from other countries' colocation providers. The major US data center market investors are Equinix, Digital Realty, CyrusOne, Vantage Data Centers, STACK Infrastructure, Switch, DataBank, and QTS Realty Trust. In addition, the operators have pledged to become carbon-neutral and procure renewable energy to power their data centers.


Prominent Data Center Investors



Digital Realty


NTT Global Data Centers

Other Data Center Investors


American Tower



Compass Datacenters

COPT Data Center Solutions


Cyxtera Technologies



EdgeCore Internet Real Estate



Element Critical



fifteenfortyseven Critical Systems Realty (1547)

GIGA Data Centers

H5 Data Centers


Iron Mountain

Netrality Data Centers

Novva Data Centers

Prime Data Centers

QTS Realty Trust

Sabey Data Centers

Skybox Datacenters

Stream Data Centers

STACK Infrastructure


T5 Data Centers


Vantage Data Centers

Vapor IO

New Entrants


Corscale Data Centers

Edge Centres


PowerHouse Data Centers

Quantum Loophole


Market Segmentation

Colocation Services:Retail Colocation and Wholesale Colocation

Infrastructure: Electrical Infrastructure, Mechanical Infrastructure, and General Construction

Electrical Infrastructure: UPS Systems, Generators, Switches & Switchgears, PDUs, and Other Electrical Infrastructure

Mechanical Infrastructure: Cooling Systems, Rack Cabinets, and Other Mechanical Infrastructure

Cooling Systems: CRAC and CRAH Units, Chillers Units, Cooling Towers, Condensers, and Dry Coolers, Economizers & Evaporative Coolers, and Other Cooling Units

Cooling Techniques: Air-based Cooling Technique and Liquid-based Cooling Technique

General Construction: Core & Shell Development, Installation & Commissioning Services, Engineering & Building Design, Fire Detection & Suppression, Physical Security, and DCIM/BMS Solutions

Tier Standard: Tier I & Tier II, Tier III, and Tier IV

Region: Southeastern US, Midwestern US, Southwestern US, Western US, and Northeastern US

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