US Data Center Colocation Market Size Likely to Grow at a CAGR of 16% By 2033

As per the current market research conducted by CMI Team, the US Data Center Colocation market size is expected to record a CAGR of 16% from 2023 to 2032. In 2022, the market size is projected to reach a valuation of USD 48.08 billion. By 2032, the valuation is anticipated to reach USD 205.55 billion.

US Data Center Colocation Market: Dynamics

The US data center colocation market is influenced by various dynamic factors that shape its growth and development. These dynamics include:

• Growing Digital Transformation: The ongoing digital transformation across industries has resulted in a massive increase in data generation and storage needs. Data center colocation providers play a crucial role in supporting businesses’ IT infrastructure requirements, offering scalable and reliable solutions to accommodate their data growth.

• Cloud Adoption: The rapid adoption of cloud services, including public, private, and hybrid clouds, has contributed to the expansion of the colocation market. Colocation facilities serve as strategic locations for cloud providers, enabling them to host their infrastructure closer to end-users and offer improved performance and low-latency services.

• Edge Computing: The rise of edge computing, driven by the need for real-time data processing and reduced latency, has influenced the data center colocation market. Edge data centers closer to end-users and IoT devices, have become increasingly important for delivering efficient and responsive services.

• Cost-Effectiveness: Data center colocation offers businesses a cost-effective alternative to building and maintaining their private data centers. By leveraging shared infrastructure, businesses can reduce capital expenditures and operational costs while benefiting from state-of-the-art facilities and security measures.

• Interconnection and Network Connectivity: Colocation facilities act as interconnection hubs, enabling businesses to access a diverse range of network carriers, cloud providers, and other partners. This interconnected ecosystem facilitates seamless data exchange and collaboration, fostering innovation and efficiency.

• Data Security and Compliance: As data becomes more valuable and subject to stringent regulations, data center colocation providers invest heavily in robust security measures and compliance standards. This has become crucial for businesses looking to protect their sensitive data and meet regulatory requirements.

Report Scope

US Data Center Colocation Market: COVID-19 Analysis

• Increased Demand for Digital Services: The pandemic forced businesses and individuals to shift their activities online, leading to a surge in demand for digital services. This increased demand for cloud services and data storage drove up the need for data center colocation to support the expanding digital infrastructure.

• Accelerated Digital Transformation: The pandemic accelerated digital transformation initiatives across industries. Many businesses embraced remote work, e-commerce, and online collaboration, necessitating more robust IT infrastructure and data storage capabilities provided by data center colocation facilities.

• Data Center Resilience and Reliability: As businesses relied heavily on digital services during the pandemic, data center resilience and reliability became paramount. Data center colocation providers experienced a heightened focus on maintaining continuous operations and ensuring minimal downtime to meet customer needs.

• Surge in Internet Traffic: With people spending more time online for work, education, entertainment, and shopping during lockdowns, internet traffic witnessed a significant increase. Data center colocation facilities played a crucial role in handling this surge in data demand, ensuring smooth online experiences for users.

• Supply Chain Disruptions: COVID-19 led to supply chain disruptions, affecting the construction and deployment of new data center facilities. Delays in equipment procurement and deployment could have impacted data center expansion plans.

• Focus on Health and Safety: Data center colocation providers had to implement rigorous health and safety measures to protect staff and maintain data center operations. These measures included enhanced cleaning, social distancing protocols, and remote work arrangements.

List of the prominent players in the US Data Center Colocation Market:

• Equinix
• Digital Realty
• CyrusOne
• CoreSite Realty Corporation
• CenturyLink (now Lumen Technologies)
• Cologix
• NTT Global Data Centers Americas (formerly RagingWire Data Centers)
• Iron Mountain
• vXchnge
• Zayo Group
• Others

The US Data Center Colocation Market is segmented as follows:

By Colocation Type

• Retail
• Wholesale

By Enterprise Size

• Large
• SMEs

By Tier Level

• Tier 1
• Tier 2

By End-use

• BFSI
• Retail

On the basis of US Geography

• Northeast Region
• Southeast Region
• Midwest Region
• West Coast Region
• Southwest Region
• Mountain States