Data Center Colocation Market Size, Share, Growth, Trends, and Global Industry Analysis: By Solution Type (Wholesale Colocation, Retail Colocation), By Size of the Organization (Small and Medium Enterprises, Large Enterprises), By End-user (BFSI, Manufacturing, IT and Telecommunications, Healthcare & Lifesciences, Government, Entertainment and Media), and Region

Data Center Colocation Market size was valued at US$ 53,191.2 million in 2023 and is poised to grow at a significant CAGR of 14.1% from  2024-2030. The colocation of data centers is a service that allows businesses and organizations to rent space for servers and other computer equipment. Data center colocation is in high demand since it helps businesses with data center administration, planning, operational strategies, risk management, and more. They have a cooling unit, an IP system, and a backup power supply. When a firm or institution is unable to construct its own colocation data center, it purchases space from other colocation data centers in the form of cabinets or racks. Colocation data centers are less expensive, more dependable, easily scalable, may be located near consumers, and require fewer technical staff than previously utilized data centers.

The rapid proliferation of structured and unstructured data and growing demand for cloud computing are expected to fuel the growth of the global market throughout the forecast period. The growing capital expenditure involved with owning and maintaining large computing facilities is another reason expected to promote the growth of colocation data centers. Predictable pricing, high reliability, simple scalability, and overall lower costs are some of the key factors influencing colocation demand, which is expected to continue over the forecast period.

As edge computing applications take off, high-capacity networks are becoming increasingly crucial. Due to network latency issues and the requirement for instantaneous real-time insights, multi-locational hybrid data architectures have emerged. Another reason driving the increased need for data centre colocation is the continued adoption of various disruptive technologies, such as cloud computing, IoT, self-driving vehicles, and advanced robots. Because of the continual development of these technologies and the subsequent adoption of smart devices, lower latency has been more in demand. As a result, colocation allows cloud service providers to place their data centre facilities adjacent to their customers, resulting in high bandwidth and low latency data transfer.

Data Center Colocation Market Key Developments

In December 2022, Equinix, Inc., a significant digital infrastructure company, announced plans to join the South African market with a US$160 million data centre investment, increasing its present footprint on the African continent in Nigeria, Ghana, and Côte d'Ivoire. The next data centre is expected to open in 2024. JN1, a new 4.0 Megawatt data centre, will provide over 20,000 gross square feet of colocation space as well as 690+ cabinets.