Press release
Data Center Colocation Market Forecast 2035 | Key Driver, Restraint, and Growth Opportunity
Data Center Colocation Market Forecast 2035 | Key Driver, Restraint, and Growth Opportunity
Get the Detailed Industry Analysis (including the Table of Contents, List of Figures, and List of Tables) - from the Data Center Colocation Market Research Report: https://marketgenics.co/press-releases/data-center-colocation-market-41805
Global Data Center Colocation Market Forecast 2035:
According to the report, the global data center colocation market is likely to grow from USD 83.5 Billion in 2025 to USD 306.8 Billion in 2035 at a highest CAGR of 13.9% during the time period. The growing shift to digital modernization, along with ongoing demand for secure, scalable infrastructure and real-time processing of data, is accelerating the global data center colocation market's growth.
Organizations and financial companies are continuing to apply colocation for cloud-native core systems, AI-based analysis, and real-time compliance monitoring. For example, in April 2025, CoreSite rolled out an AI-optimized colocation platform for high-volume, latency-sensitive financial workloads, and added regulatory readiness. In addition, Equinix announced improvements to its global interconnection fabric made it easier to integrate with many cloud providers for real-time transaction processing, cross-border data compliance, and use by banks and leasing companies globally.
The 2024 Global Data Infrastructure Report found that 70% of the 1,000 enterprise IT-leaders interviewed had moved toward hybrid infrastructure strategies, where colocation will be an essential part of their scalable and compliant operations. These shifts indicate that digital transformation, regulatory complexity, and performance-driven infrastructure demands are fundamental tenants for the further adoption of colocation services.
"Key Driver, Restraint, and Growth Opportunity Shaping the Global Data Center Colocation Market"
The data center colocation industry is becoming more influenced by the increasing necessity for smart, scalable infrastructure to indicate the initial stages of digital transformation, host AI workloads, and develop real-time financial processing capabilities. In January 2025, Digital Realty collaborated with a top fintech consortium to create an AI-optimized colocation suite that would facilitate the faster deployment of automated credit decisioning systems and real-time compliance analytics, for banks and leasing companies. This emphasizes the significant function of colocation in facilitating high-performance computing in regulatory-ready environments.
Even though, the industry has challenges associated with legacy IT dependencies and the increasing degree of complexity in hybrid infrastructure integration. For example, early in 2025, a number of mid-tier financial institutions in Europe reported setbacks related to data migration and connectivity issues between their on-premise IT systems and third-party collocation providers, which limited their potential to fully utilize digital environments.
There are development potentials emerging for API-centric interconnection services that connect colocation into the ecosystem of enterprise IT. To illustrate, in March 2025, STACK Infrastructure launched additional modular layers for API integration capability in its facilities that facilitate interaction between leasing platforms, ERP systems, and real-time tools. This paradigm shift also indicates the broader trend of the market moving towards embedded infrastructure solutions actually built on speed, interoperability and end-to-end visibility for financial and digital enterprises.
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Regional Analysis of Global Data Center Colocation Market
North America continues to lead the way in the data center colocation market, bolstered by an established financial and IT infrastructure, early adoption of cloud services, and increasing demand for scalable and compliant infrastructure solutions. Most recently, in April 2025, Equinix added interconnection services in key U.S. metropolitan areas to address heightened colocation demands from fintechs and large financial institutions embarking on digital transformation and real-time data processing initiatives.
Further, Asia Pacific is experiencing accelerated growth, spurred by rapid digitization, an increase in cloud-native deployments, and growing enterprises' IT demands. For example, in March 2025, NTT Communications announced the expansion of its colocation campuses in Tokyo and Mumbai to accommodate the rapidly accelerating demand from digital banking, e-commerce, and AI analytics sectors. The rapidly changing regulatory environment and smart city investment have also continued to drive data center modernization in developing economies.
Moreover, Europe continues to grow at a steady pace in the data center colocation market due to advancing regulatory frameworks and environmental design concerns. In February 2025, Digital Realty expanded its green data center portfolio in Frankfurt and Amsterdam to address the needs for ESG-compliant infrastructure, underscoring how regulatory pressures and green finance are driving energy-efficiency and compliance-oriented colocation solutions in the region.
Prominent players operating in global data center colocation market include prominent companies such as Aligned Data Centers, AT&T Inc., China Telecom Corporation Limited, Cologix Inc., CoreSite Realty Corporation, CyrusOne Inc., Cyxtera Technologies, DataBank Holdings Ltd., Digital Realty Trust Inc., Equinix Inc., Global Switch Limited, Interxion, Iron Mountain Inc., KDDI Corporation, NTT Communications Corporation, QTS Realty Trust, STACK Infrastructure, Vantage Data Centers, Verizon Communications, and along with several other key players.
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The global data center colocation market has been segmented as follows:
Global Data Center Colocation Market Analysis, by Service Type
Retail Colocation
Individual rack spaces
Cabinet-level services
Shared infrastructure resources
Wholesale Colocation
Global Data Center Colocation Market Analysis, by Organization Size
Large Enterprises
Small & Medium Enterprises (SMEs)
Global Data Center Colocation Market Analysis, by Infrastructure Component
IT Infrastructure
Server hosting
Storage solutions
Network equipment
Others
Power Infrastructure
Uninterruptible power supply (UPS)
Power distribution units (PDU)
Backup generators
Others
Cooling Infrastructure
HVAC systems
Liquid cooling solutions
Others
Security Infrastructure
Physical security systems
Biometric access controls
Global Data Center Colocation Market Analysis, by Deployment Model
Public Colocation
Private Colocation
Hybrid Colocation
Global Data Center Colocation Market Analysis, by Connectivity Type
Carrier-Neutral Facilities
Single-Carrier Facilities
Global Data Center Colocation Market Analysis, by Power Capacity
Low Power (< 1 MW)
Medium Power (1-10 MW)
High Power (> 10 MW)
Global Data Center Colocation Market Analysis, by Tier Classification
Tier I Data Centers
Tier II Data Centers
Tier III Data Centers
Tier IV Data Centers
Global Data Center Colocation Market Analysis, by Application Workload
Traditional Applications
Cloud-Native Applications
AI/ML Workloads
Edge Computing Applications
Others
Global Data Center Colocation Market Analysis, by Contract Duration
Short-term Contracts (< 1 year)
Medium-term Contracts (1-3 years)
Long-term Contracts (> 3 years)
Global Data Center Colocation Market Analysis, by End-Use Industry
IT & Telecommunications
Network infrastructure hosting
Telecom equipment colocation
Internet service provision
Cloud service delivery
Others
Banking, Financial Services & Insurance (BFSI)
Core banking systems
Trading platforms
Risk management systems
Regulatory compliance infrastructure
Digital payment processing
Others
Healthcare & Life Sciences
Electronic health records (EHR)
Medical imaging storage
Telemedicine platforms
Research data management
Others
Government & Public Sector
Citizen service platforms
Data sovereignty requirements
Emergency response systems
Smart city infrastructure
Defense and security applications
Others
Media & Entertainment
Content delivery networks (CDN)
Video streaming infrastructure
Digital asset management
Gaming server hosting
Live broadcast systems
Others
E-commerce & Retail
Online marketplace platforms
Inventory management systems
Customer data analytics
Payment processing
Supply chain management
Others
Manufacturing & Automotive
Energy & Utilities
Other End-use Industries
Global Data Center Colocation Market Analysis, by Region
North America
Europe
Asia Pacific
Middle East
Africa
South America
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MarketGenics is a global market research and management consulting company empowering decision makers across healthcare, technology, and policy domains. Our mission is to deliver granular market intelligence combined with strategic foresight to accelerate sustainable growth.
We support clients across strategy development, product innovation, healthcare infrastructure, and digital transformation.
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