North America Data Center Colocation Market, By Country, Competition, Forecast and Opportunities, 2020-2030F

The North America Data Center Colocation Market was valued at USD 27.16 Billion in 2024 and is expected to reach USD 55.47 Billion by 2030 with a CAGR of 12.47% during the forecast period. The North America Data Center Colocation market has experienced robust growth and transformation, establishing itself as a pivotal segment in the broader data center industry. This market's expansion is driven by the increasing demand for data storage, computing power, and network connectivity, fueled by the rise of cloud computing, big data analytics, and digital transformation across various sectors.

One of the primary factors contributing to the market's growth is the need for scalable and flexible IT infrastructure. Organizations are shifting from maintaining in-house data centers to utilizing colocation services to manage their data more efficiently. This transition is largely driven by the desire to reduce capital expenditures, mitigate operational complexities, and leverage the advanced technologies and infrastructure offered by colocation providers. Colocation facilities offer businesses the ability to scale their operations rapidly, without the substantial upfront investment required for constructing and maintaining a proprietary data center.

Key Market Drivers

Increased Adoption of Cloud Computing

The rapid adoption of cloud computing is a primary driver of the North America Data Center Colocation market. As businesses increasingly migrate their workloads and applications to the cloud, they require scalable and flexible infrastructure to support these cloud environments. Colocation providers offer an ideal solution by providing high-density, secure facilities with robust connectivity options that integrate seamlessly with cloud platforms. This shift allows companies to leverage cloud services while maintaining control over their physical infrastructure.

The growing demand for hybrid and multi-cloud strategies further fuels the need for colocation, as organizations seek to optimize their IT environments and ensure efficient data management. With cloud computing becoming a cornerstone of digital transformation, the demand for colocation services is expected to continue its upward trajectory. North America generates approximately 2.5 quintillion bytes of data daily, much of which is stored and processed in cloud environments. With 60% of enterprise workloads now hosted on cloud platforms, the demand for robust data integration tools to manage disparate datasets is escalating.

The USD 310 billion valuation of North America's public cloud market in 2023 highlights the rapid adoption of cloud services by enterprises. This drives demand for colocation facilities, as businesses increasingly adopt hybrid and multi-cloud strategies that require scalable, secure, and interconnected data center infrastructure. Colocation services enable seamless cloud integration, lower latency, and cost-efficient IT operations, directly boosting the market.

Key Market Challenges

Rising Operational Costs

One of the primary challenges facing the North America Data Center Colocation market is the rising operational costs associated with data center management. As the demand for colocation services increases, so do the costs related to power, cooling, and maintenance. Data centers require significant amounts of electricity to power servers and cooling systems, and the costs of energy have been on the rise.

Maintaining and upgrading infrastructure to ensure reliability and efficiency adds to the operational expenses. The need for advanced cooling technologies and energy-efficient solutions to manage heat and power consumption also contributes to the rising costs. These financial pressures can impact the profitability of colocation providers and result in higher costs for customers. Managing these costs effectively while maintaining high service levels and competitive pricing is a significant challenge for the industry.

Key Market Trends

Rising Demand for Edge Data Centers

The North America Data Center Colocation market is witnessing a significant shift towards edge data centers. As the demand for real-time data processing and low-latency applications grows, businesses are increasingly investing in edge computing solutions. Edge data centers are strategically located closer to end-users and devices, reducing latency and improving data transmission speeds.

This trend is driven by the proliferation of IoT devices, autonomous vehicles, and smart city technologies, which require faster data processing and response times. Colocation providers are responding by expanding their offerings to include edge data centers, ensuring they meet the evolving needs of clients who require localized data management and high-speed connectivity. This trend reflects a broader shift towards decentralizing data infrastructure to enhance performance and support emerging technologies.

Key Market Players

Equinix, Inc.
Digital Realty Trust Inc.

CyrusOne LLO

CoreSite Realty Corporation

QTS Realty Trust, LLC

Iron Mountain, Inc.

NTT Communications Corporation

Alibaba Group Holding Limited

Microsoft Corporation

Amazon Web Services, Inc.

Telehouse International Corporation of Europe Ltd

STACK Infrastructure

Report Scope:

In this report, the North America Data Center Colocation Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

North America Data Center Colocation Market, By Colocation Type:

• Retail
• Wholesale

North America Data Center Colocation Market, By Enterprise Size:

• Large Enterprise
• SMEs

North America Data Center Colocation Market, By Tier Level:

• Tier I
• Tier II
• Tier III
• Tier IV

North America Data Center Colocation Market, By Deployment Type:

• Cloud
• On-Premises

North America Data Center Colocation Market, By End Use Industry:

• BFSI
• IT & Telecom
• Healthcare
• Government
• Retail
• Others

North America Data Center Colocation Market, By IT Power Capacity:

• < 1MW
• 1MW-10MW
• 10MW-20MW
• >20MW

North America Data Center Colocation Market, By Utilized Area:

• < 500 Sq. Ft.
• 500-5000 Sq. Ft.
• 5000-10000 Sq. Ft.
• >10000 Sq. Ft.

North America Data Center Colocation Market, By Utilized Rack:

• < 10
• 10-100
• 100-200
• >200

North America Data Center Colocation Market, By Country:

• United States
• Canada
• Mexico

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the North America Data Center Colocation Market.

Available Customizations:

With the given market data, the publisher offers customizations according to a company's specific needs. The following customization options are available for the report.

Company Information

Detailed analysis and profiling of additional market players (up to five).

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