Colocation Edge Data Center Market Report 2025

This report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market’s historic and forecast market growth by geography.

The colocation edge data center market size has grown exponentially in recent years. It will grow from $9.88 billion in 2024 to $12.44 billion in 2025 at a compound annual growth rate (CAGR) of 26%. The growth in the historic period can be attributed to rising investment in digital transformation, rising use cases of cloud-based solutions, expansion of the IT and telecom industries, introduction of new data center facilities, and increase in utilization of online services.

The colocation edge data center market size is expected to see exponential growth in the next few years. It will grow to $31 billion in 2029 at a compound annual growth rate (CAGR) of 25.6%. The growth in the forecast period can be attributed to growing adoption of 5G networks, rising demand for edge data centers as a service, demand for advanced technologies, growing use of cloud services, and an and an increase in data centers and edge computing solutions. Major trends in the forecast period include need to improve data handling and customer services, use of edge solutions, innovation of hybrid cloud infrastructure, rising integration of cloud-based solutions, and implementation of advanced technologies in existing systems.

The upward trajectory of 5G network adoption is set to propel the expansion of the colocation edge data center market in the coming years. As the fifth generation of mobile network technology, 5G offers significant improvements in data speeds, latency reduction, and network capacity, catering to the escalating demands of IoT, streaming services, and emerging technologies such as autonomous vehicles and smart cities. Colocation edge data centers play a pivotal role in facilitating the widespread adoption of 5G by delivering high-performance computing resources with minimal latency at the network edge. These facilities enable edge computing, scalability, dependability, and IoT deployments, laying the groundwork for fully harnessing the capabilities of 5G networks. According to 5G Americas' report in April 2023, global 5G wireless connections witnessed a remarkable 76% growth from the end of 2021 to the end of 2022, reaching a total of 1.05 billion connections, further underscoring the driving force behind the growth of the colocation edge data center market.

Leading companies in the colocation edge data center market are increasingly focusing on developing advanced solutions tailored to specific needs, such as high-density colocation designed for AI workloads, in order to gain a competitive advantage. High-density colocation for AI workloads provides specialized data center solutions that address the complex computing and storage demands of artificial intelligence applications, utilizing scalable infrastructure and advanced power management systems. For example, in October 2022, DCX, a US-based startup in the data center industry, launched as a new brand dedicated to high-density colocation for AI workloads. DCX aims to meet the sophisticated requirements of digital infrastructure. Its first facility, DCX Goodyear 1, located in the Greater Phoenix area, is designed to support AI and machine learning (ML) applications. Situated in Goodyear, a rapidly growing data center hub within Phoenix, the facility occupies a six-acre campus and features two online suites capable of supporting up to six megawatts of power, with the option to expand to 12 megawatts. Each suite offers between 700 kW and 1 megawatt of capacity and is equipped with essential infrastructure, including uninterruptible power supply (UPS) systems and waterless cooling solutions.

In September 2023, in a strategic move aimed at bolstering its European presence, nLighten acquired Proximity Data Centers, marking a significant step towards establishing a pan-European edge data center platform. This acquisition strengthens nLighten's capabilities in meeting the surging demand for edge computing and colocation services across the UK and beyond. Leveraging Proximity's expertise, agility, and local market penetration, nLighten aims to capitalize on the growing trend towards edge computing and the colocation of edge data centers. Proximity Data Centres, a UK-based data center services provider, offers a range of solutions including colocation edge data centers, cloud connectivity, and security services, aligning seamlessly with nLighten's strategic objectives and market expansion plans.

Major companies operating in the colocation edge data center market are Verizon Communications Inc., Dell Inc., Huawei Technologies Co. Ltd., NTT Communications Corporation, Hitachi Ltd., China Telecom Global Limited, International Business Machines Corporation, Cisco Systems Inc., KDDI Corporation, Schneider Electric SE, Fujitsu Limited, Hewlett Packard Enterprise Company, NVIDIA Corporation, NEC Corporation, Eaton Corporation PLC, Inventec Corporation, ASUSTeK Computer Inc., Singapore Telecommunications Limited, Equinix Inc., Vertiv Group Corporation, Super Micro Computer Inc., Digital Realty Trust Inc., Rackspace Inc., Arm Ltd., Inspur Co. Ltd., Arrcus Inc.

North America was the largest region in the colocation edge data center market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the colocation edge data center market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the colocation edge data center market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The colocation edge data center market includes revenues earned by entities by providing network connectivity services, remote hands support, hardware installation, maintenance, and monitoring services. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

A colocation edge data center is a facility that offers businesses space, power, cooling, and physical security for deploying their server, storage, and networking equipment. These data centers are strategically located at the edge of a network, closer to where data is generated and consumed, such as in urban areas or near industrial sites. They serve as a cost-effective and scalable solution for organizations seeking to house their IT infrastructure.

The primary types of colocation edge data centers comprise retail colocation and wholesale colocation. Retail colocation involves renting space, power, and cooling within a data center facility operated by a third-party provider. These facilities cater to a variety of application areas including banking, financial services, and insurance (BFSI), energy, government and defense, healthcare, information technology and telecom, manufacturing, retail, and others. They are utilized by various end-users ranging from small and medium enterprises (SMEs) to large enterprises.

The colocation edge data center research report is one of a series of new reports that provides colocation edge data center market statistics, including the colocation edge data center industry's global market size, regional shares, competitors with a colocation edge data center market share, detailed colocation edge data center market segments, market trends and opportunities, and any further data you may need to thrive in the colocation edge data center industry. This colocation edge data center market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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