Data Center Colocation Market Size, Share, Growth Analysis, By Type(Retail Colocation, and Wholesale Colocation), By Industry(Banking Financial Services, & Insurance (BFSI), IT & telecom, Government & Defense), By End-User(Small and Medium-Sized Enterprises (SMEs), Large Enterprises), By Region - Industry Forecast 2025-2032

Data Center Colocation Market size was valued at USD 62.46 Billion in 2023 and is poised to grow from USD 72.02 Billion in 2024 to USD 224.94 Billion by 2032, growing at a CAGR of 15.3% during the forecast period (2025-2032).

Today, data centers have become a vital part of modern corporate practices responsible for monitoring business applications. The requirement for IT infrastructure for operating a business has increased immensely as businesses are relying more on data, increasing the adoption of cloud services. Colocation data centers have allowed rapid scaling up of IT needs of businesses. The demand of data center colocation is increasing more because of the high expense of owning and maintaining data centers, especially for organizations that generate inconsistent data volumes. The advent of technologies like cloud computing, autonomous vehicles, internet of things (IoT), and advanced robotics have boosted the demand for faster data processing and higher bandwidth. To efficiently make use of these technologies needs less latency and faster network connectivity. Furthermore, the colocation data centers are also ideal for meeting low latency and faster network connectivity. This is because the operators can identify their data center facilities that are near to the user, enabling them to provide better storage and networking. The advent of 5G technology is also increasing the implementation of colocation providers that offer services in remote locations.