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Data Center Colocation Market - Global Outlook & Forecast 2021-2026

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THE GLOBAL DATA CENTER COLOCATION MARKET SIZE BY INVESTMENT TO REACH USD 33.41 BILLION BY 2026, GROWING AT A CAGR OF 4.40% DURING THE FORECAST PERIOD

Data Center Colocation Market Share, Size, Trends Analysis Report by Colocation Services (Retail Colocation and Wholesale Colocation), Infrastructure (Electrical Infrastructure, Mechanical Infrastructure, and General Construction), Electrical Infrastructure (UPS Systems, Generators, Transfer Switches & Switchgear, PDUs, and Other Electrical Infrastructure), Mechanical Infrastructure (Cooling Systems (CRAC & CRAH Units, Chiller Units, Cooling Towers, Condensers & Dry Coolers, Economizers & Evaporative Coolers, and Other Cooling Units), Racks, Other Mechanical Infrastructure, and Cooling Techniques (Air-Based Cooling Technique and Liquid-Based Cooling Technique)), General Construction (Core & Shell Development, Installation & Commissioning Services, Engineering & Building Design, Physical Security, and DCIM/BMS Solutions), Tier Standards (Tier I & II, Tier III, and Tier IV), and Geography (North America, Latin America, Western Europe, Nordics, Central & Eastern Europe, Middle East, Africa, APAC, and Southeast Asia); Industry Analysis Report, Regional Outlook, Growth Potential, Price Trends, Competitive Market Share & Forecast 2021–2026.

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Most Exhaustive Report

851 Pages

156 Tables

433 Charts

9 Regions

37 Countries

108 Companies

7 Market Segment

DATA CENTER COLOCATION MARKET REPORT SCOPE

Report Attribute Details
MARKET SIZE (INVESTMENT) USD 33.41 BILLION (2026)
MARKET SIZE (AREA) 24.92 MILLION SQ. FT (2026)
MARKET SIZE (POWER CAPACITY) 4,815 MW (2026)
COLOCATION REVENUE USD 59.60 BILLION (2026)
CAGR (INVESTMENT) 4.40% (2021-2026)
BASE YEAR 2020
FORECAST YEAR 2021-2026
GEOGRAPHIC ANALYSIS North America, Latin America, Western Europe, Nordics, Central & Eastern Europe, Middle East, Africa, APAC, and Southeast Asia
COUNTRIES COVERED US, Canada, Brazil, Other Latin American Countries, UK, Germany, Netherlands, France, Ireland, Switzerland, Italy, Spain, Other Western European Countries, Denmark, Sweden, Norway, Finland & Iceland, Russia & Czech Republic, Poland & Austria, Other Central & Eastern European Countries, UAE, Saudi Arabia, Turkey, Other Middle Eastern Countries, South Africa, Kenya, Other African Countries, China & Hong Kong, Australia & New Zealand, India, Japan, Rest of APAC, Southeast Asia, Singapore, Indonesia, Malaysia, Thailandand Other Southeast Asian Countries

DATA CENTER COLOCATION INDUSTRY INSIGHTS

The global data center colocation market by investment was valued at USD 25.80 billion in 2020 and is expected to reach USD 33.41 billion in 2026, growing at a CAGR of 4.40% during the forecast period.

The colocation market is attractive, with data centers offering a higher return on investment (ROI) than other commercial and industrial properties. In 2021, the increase in digitalization is due to the pandemic, several initiatives taken by different countries, and the deployment of technology such as IoT, big data, 5G, and edge. The rising investment by cloud service providers across various geographies is accelerating the colocation industry globally.

The colocation operators such as Digital Realty, CyrusOne, Equinix, NTT Global Data Centers, and ST Telemedia Global Data Centres are adopting renewable energy and taking significant steps towards sustainability. The usage of renewable energy is growing among colocation providers and hyperscale providers, with most hyperscale facilities expected to operate with renewable energy resources by 2026.

KEY HIGHLIGHTS

  • COVID-19 has been a catalyst to digitalization initiatives and a solid boost to colocation market growth.
  • An increase in digitalization across businesses will continue to grow the data center investment from colocation services.
  • The rack power density is expected to grow from an average of 4−6 kW in 2020 to about 10−12 kW in 2026 due to the increased high-performance infrastructure deployment.
  • The Global data center colocation air-based cooling market will surpass USD 2.23 billion in 2026.
  • The North American data center colocation market by investment will grow at a CAGR of more than 2% during the forecast period.
  • The Latin American colocation industry by investment is expected to reach a billion by 2026.

DATA CENTER COLOCATION MARKET SEGMENTATION

This research report includes a detailed segmentation by:

  • Colocation Services
  • Infrastructure
  • Electrical Infrastructure
  • Mechanical Infrastructure
  • General Construction
  • Tier Standards
  • Geography 

MARKET SHARES & SEGMENTS

  • Colocation services in data centers are offered through retail and wholesale colocation. In terms of market share, the wholesale segment continues to dominate the market.
  • Retail colocation services are likely to grow as several enterprises in developing countries are shifting from traditional server room infrastructure to data centers.
  • In terms of power infrastructure, UPS systems were the highest contributors to market investments by adopting VRLA battery-powered systems, which are being strongly complemented with the procurement of lithium-ion batteries.
  • Free cooling chillers that facilitate partial cooling using outside air are also highly preferred by several data centers. 
  • Modern data centers are also being protected from EMP and lightning during natural disasters. In the coming years, the industry will witness increased robotic monitoring systems with sensors and video surveillance across the colocation industry.
  • Several data centers built in recent times are of Tier III standards due to an increased need for redundant components. The global Tier III data center colocation market will grow at a CAGR of more than 5% by 2026.

GEOGRAPHY ANALYSIS

North America is among the top locations in terms of colocation facility market growth. In Canada, cloud providers are seeing volatile growth over the past 2−3 years, resulting in significant growth for wholesale data center providers. In the US, Virginia, Texas, and California are the major markets for colocation operations, followed by Illinois, Georgia, Nevada, and Oregon. Canada is an upcoming market owing to its accessibility to renewable energy sources and low power costs. More than 50% of enterprises in Canada use SaaS. Private cloud adoption is growing among government agencies and financial services. The Canadian public cloud market is expected to generate a revenue of more than USD 7.5 billion in 2021, which is likely to reach over USD 13 billion by 2026, with the SaaS segment-leading revenue growth.

COMPETITIVE LANDSCAPE

Investments led the global data center colocation market in terms of investments in 2020 from Digital Realty, with the largest market share. Digital Realty itself invested in more than 20 projects across several locations worldwide. Interxion invested in multiple projects across Paris, Frankfurt, Amsterdam, London, Zurich, Stockholm, and Marseille. Vendors are focusing on continuous development to sustain in the data center colocation industry. Several vendors in the market are offering highly customizable racks to intensify the competition. The industry is witnessing multiple innovations, with liquid immersion and direct-to-chip cooling vendors are partnering with IT infrastructure providers to design and develop innovative solutions with a target PUE of less than 1.1. The data center colocation industry will witness vendors entering developing countries and targeting clients that operate AI and machine learning workloads.

The data center colocation market research report includes in-depth coverage of the industry analysis with revenue and forecast insights for the following segments:

  • Colocation Services
    • Retail Colocation
    • Wholesale Colocation
  • Infrastructure
    • Electrical Infrastructure
    • Mechanical Infrastructure
    • General Construction
  • Electrical Infrastructure
    • UPS Systems
    • Generators
    • Transfer Switches & Switchgear
    • PDUs
    • Other Electrical Infrastructure
  • Mechanical Infrastructure
    • Cooling Systems
      • CRAC & CRAH Units
      • Chiller Units
      • Cooling Towers
      • Condensers & Dry Coolers
      • Economizers & Evaporative Coolers
      • Other Cooling Units
      • Racks
      • Other Mechanical Infrastructure
    • Cooling Techniques
      • Air-Based Cooling Technique
      • Liquid-Based Cooling Technique
    • General Construction
      • Core & Shell Development
      • Installation & Commissioning Services
      • Engineering & Building Design
      • Physical Security
      • DCIM/BMS Solutions
    • Tier Standards
      • Tier I & II
      • Tier III
      • Tier IV
    • Geography
      • North America
        • US
        • Canada
      • Latin America
        • Brazil
        • Other Latin American Countries
      • Western Europe
        • UK
        • Germany
        • Netherlands
        • France
        • Ireland
        • Switzerland
        • Italy
        • Spain
        • Other Western European Countries
      • Nordics
        • Denmark
        • Sweden
        • Norway
        • Finland & Iceland
      • Central & Eastern Europe
        • Russia & Czech Republic
        • Poland & Austria
        • Other Central & Eastern European Countries
      • Middle East
        • UAE
        • Saudi Arabia
        • Turkey
        • Other Middle Eastern Countries
      • Africa
        • South Africa
        • Kenya
        • Other African Countries
      • APAC
        • China & Hong Kong
        • Australia & New Zealand
        • India
        • Japan
        • Rest of APAC
        • Southeast Asia
          • Singapore
          • Indonesia
          • Malaysia
          • Thailand
          • Other Southeast Asian Countries

Frequently Asked Questions

The global data center colocation market by investment is expected to reach USD 33.41 billion in 2026.
North America is among the leading locations in terms of colocation data center market growth with early availability and adoption of innovative technology and investments from colocation service providers.
In terms of share, the wholesale segment continues to dominate the market with around 69%.
Growing adoption of li-Ion batteries & fuel Cells, submarine cables, are OCP & hyperscale-specific infrastructure are the major factors driving the data center colocation industry.
21Vianet Group, China Telecom, Colt Data Centre Services (COLT DCS), Compass Datacenters, CoreSite Realty, CyrusOne, Digital Realty, Equinix, and GDS Services are the key players in the data center colocation industry.
The adoption of 5G is growing demand for edge data centers. The increase in demand for cloud services is the latest trend in the data center colocation market.
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