Data Center Colocation Market worth $204.4 billion by 2030- Exclusive Report by MarketsandMarkets™

DELRAY BEACH, Fla., June 27, 2025 /PRNewswire/ -- The Data Center Colocation Market is expanding rapidly, with a projected market size rising from USD 104.2 billion in 2025 to USD 204.4 billion by 2030, at a CAGR of 14.4% during the forecast period, according to a new report by MarketsandMarkets™

This growth is driven by the surge in AI and high-density GPU workloads, which demand specialized cooling systems and power architectures. At the same time, enterprises are building hybrid-multicloud interconnection ecosystems to ensure seamless data flows and application portability across multiple platforms. Stricter data-sovereignty regulations covering hosting location, residency requirements, and AI privacy also push organizations toward colocation facilities that can guarantee compliance and secure data governance. Together, these factors accelerate digital transformation across healthcare, finance, and high-performance analytics sectors.

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Scope of the Report

General Purpose IT will register the largest market share during the forecast period

General purpose IT, encompassing standard compute, storage, and networking workloads, is the largest workload type segment in the Data Center Colocation Market during the forecast period, driven by enterprises' ongoing digital transformation initiatives and cloud migration strategies. Businesses of all sizes continue to deploy mission-critical applications ERP, CRM, virtualization platforms, and web hosting on colocation infrastructure to ensure high availability and cost predictability. As hybrid IT architectures become mainstream, companies favor colocation partners that offer seamless integration with public clouds and private environments. Meanwhile, demand for HPC & AI workloads is growing rapidly, spurred by high-performance analytics and machine-learning projects, but it remains a smaller segment due to specialized infrastructure requirements and higher power densities. The ubiquity of general purpose IT workloads, flexible pricing models, scalable power options, and robust service-level agreements, underpins its dominant market share.

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Hyperscalers is poised for fastest growth rate during the forecast period

Hyperscaler, as the fastest-growing end-user segment in the Data Center Colocation Market during the forecast period, is expanding rapidly due to its enormous demand for scalable capacity, advanced automation, and energy-efficient infrastructure. Leading cloud providers and large digital platforms increasingly rely on colocation partners to support bursting workloads, accelerator-heavy computing, and global expansion without the capital-intensive burden of self-building. Hyperscalers benefit from standardized, high-density rack deployments, direct interconnection ecosystems, and co-located edge sites that reduce latency for latency-sensitive applications.

Enterprises typically seek flexible contract terms, managed services, and regional coverage to complement their on-premises data centers. The combination of hyperscalers' need for modular growth, sustainability targets, and integrated service offerings underscores their role as the primary catalyst for segmental expansion.

North America will account for the largest market during the forecast period

North America will likely be the largest regional segment in the Data Center Colocation Market during the forecast period, driven by widespread enterprise and hyperscaler investments in cloud and edge infrastructure. The US and Canada host the highest concentration of colocation facilities, offering robust interconnection hubs, advanced network density, and integrated service portfolios. Key industries, including technology, finance, healthcare, and media, rely on North American colocation providers for rapid deployment, strict data sovereignty compliance, and scalable capacity to support peak workloads. In addition, aggressive renewable energy targets and sustainability initiatives are prompting operators to adopt high-efficiency cooling and green power procurement. Europe follows as the second-largest market, with growth fueled by GDPR compliance and expanding hyperscaler footprints in major hubs like Frankfurt and London. North America's mature regulatory framework, high IT spending per capita, and leading-edge ecosystem ensure it will retain the largest share of the regional segment.

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Top Key Companies in Data Center Colocation Market:

The major players in the Data Center Colocation Market include Equinix (US), Digital Realty (US), NTT Data Corporation (Japan), QTS Data Centers (US), KDDI Corporation (Japan), Iron Mountain (US), China Telcom (China), and CyrusOne (Texas).

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