As per MRFR analysis, the US Data Colocation Market Size was estimated at 11.2 (USD Billion) in 2023. The US Data Colocation Market Industry is expected to grow from 12.51(USD Billion) in 2024 to 42.27 (USD Billion) by 2035. The US Data Colocation Market CAGR (growth rate) is expected to be around 11.703% during the forecast period (2025 - 2035).
The US Data Colocation Market is witnessing significant growth driven by various key market drivers. One major driver is the increasing demand for data storage due to the exponential growth of data generation, largely fueled by advancements in technology and the widespread adoption of cloud computing. Businesses are increasingly relying on colocation services to improve data security, redundancy, and disaster recovery capabilities. Additionally, the rising need for compliant data storage solutions, especially in sectors like healthcare and finance, is pushing organizations to seek colocation services that meet regulatory requirements.
There are numerous opportunities available in this market, particularly for providers who focus on enhancing infrastructure to support emerging technologies such as artificial intelligence and machine learning.By offering scalable and adaptable colocation services, providers can cater to businesses looking to enhance their operations through these advanced technologies. Furthermore, as remote work continues to become the norm, the requirement for robust and secure data centers is becoming more pronounced, creating an opportunity for colocation centers to expand their offerings. Recent trends within the US indicate a shift towards sustainability and green initiatives within data centers. As companies are becoming more conscious of their environmental impact, there is a growing emphasis on energy-efficient technologies and sustainable practices in data colocation services.
This trend not only caters to increasing regulatory pressures and consumer expectations but also aligns with corporate responsibilities towards environmental stewardship. Overall, the US Data Colocation Market is at a pivotal point where evolving customer needs, technological advancements, and increasing regulatory requirements are shaping the future of data storage and management. Providers who can adapt to these changes will likely capture a larger market share as they align their services with emerging market demands.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
The rapid increase in the adoption of cloud services is a significant driver for the US Data Colocation Market Industry. As organizations continue to migrate their operations to cloud-based platforms, the need for reliable data colocation services rises. According to data from the U.S. International Trade Administration, US cloud service revenues reached over 100 billion USD in 2021, marking a year-over-year growth of approximately 20%. This trend highlights the growing reliance on cloud solutions by businesses across various sectors.Major technology firms such as Amazon Web Services, Microsoft Azure, and Google Cloud are leading this charge, which stimulates demand for colocation services to host cloud infrastructure more efficiently. Data centers provide the necessary physical space, power, and cooling systems for servers, thereby facilitating this cloud-driven growth. Consequently, the thriving cloud ecosystem directly correlates with an increasing requirement for colocation facilities, which is expected to bolster the US Data Colocation Market significantly over the coming years.
Data security concerns have increasingly become a significant driver for the US Data Colocation Market Industry. Businesses in the United States face mounting threats from cyber-attacks and data breaches, leading to heightened investments in secure colocation environments. The Identity Theft Resource Center reported that data breaches exposed over 300 million records in 2020 alone, emphasizing the urgency for enterprises to secure sensitive information.As a result, organizations are opting for colocation services that provide robust security protocols, including physical security, advanced fire suppression systems, and sophisticated monitoring capabilities. Companies like Equinix and Digital Realty have introduced advanced security measures in their facilities, which helps mitigate risks for their clients and solidifies their positions in the market. The growth in data protection regulations such as the Health Insurance Portability and Accountability Act (HIPAA) and the Sarbanes-Oxley Act further reinforces the escalation of demand for secure data colocation services in the US.
The increasing adoption of Edge Computing represents a pivotal driver behind the US Data Colocation Market Industry's growth. Edge Computing brings data processing closer to the source of data generation, which significantly reduces latency and enhances user experience for applications like Internet of Things (IoT) devices and real-time data analytics. According to the Federal Communications Commission, the US has seen a 30% increase in IoT device adoption in the last five years, with millions of devices now requiring efficient data handling and processing capabilities.This shift necessitates the establishment of more localized data centers, which in turn fuels demand for colocation services. Established organizations such as EdgeConneX are pioneering edge data center solutions, catering to the growing demand for efficient data processing. Thus, the rapid evolution of Edge Computing technologies is expected to create ample opportunities for data colocation service providers across the United States, boosting the overall market substantially.
The US Data Colocation Market is increasingly evolving, driven by various types of offerings tailored to meet the diverse needs of customers. In this landscape, the Type category plays a crucial role, comprising essential components such as Network Hardware, Server and Storage solutions, Cooling Units, and others that cater to extensive operational demands. Network Hardware, which includes pivotal devices that facilitate connectivity and data transfer, has become foundational in ensuring seamless operations within data centers.
This segment is crucial as it supports the growing complexity and volume of data traffic, driven by the increasing reliance on cloud services and digital transformations across various industries in the US.The Server and Storage segment is equally important, providing the necessary computing power and capacity for data management and analysis. As organizations adopt more data-driven strategies, the demand for robust server architectures and scalable storage solutions is on the rise, emphasizing the critical nature of this segment. Moreover, Cooling Units are a significant consideration within the Type category, as they are vital for maintaining the optimal functioning temperature of data center equipment. With an increase in energy efficiency standards and a focus on sustainable practices, effective cooling solutions are becoming a key priority for data center operators in the US.
Lastly, the Others category encompasses various ancillary solutions that support data colocation operations, from security systems to backup power solutions, enhancing overall service reliability and operational integrity. Collectively, these components within the Type segment contribute to the robust framework of the US Data Colocation Market, highlighting not just their individual importance but also the collaborative synergy needed to support the ever-growing demand for data services. As businesses and service providers strive to enhance their operational efficiency, investing in these types of solutions becomes pivotal for long-term success in a competitive landscape, ultimately acting as a cornerstone for the growth trajectory of the US Data Colocation Market as a whole.A notable factor is the increasing regulations around data privacy and management in the US, which necessitates advanced solutions across all segments, thereby driving innovation and adoption strategies within the data colocation ecosystem, ensuring it meets both compliance and efficiency needs.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
The Deployment Mode segment of the US Data Colocation Market plays a crucial role in shaping the landscape of data management and storage solutions. As businesses increasingly seek to enhance their operational efficiency, the demand for data colocation services continues to rise. This segment is primarily categorized into two types: Small Scale and Large Scale. Small Scale deployments often cater to startups and mid-sized enterprises that require flexibility and cost-effective solutions to manage their data storage needs. These facilities emphasize high accessibility and agility, making them ideal for companies looking to scale quickly without significant upfront investment.On the other hand, Large Scale deployments typically serve larger organizations with substantial data requirements. These facilities offer robust infrastructure, enhanced security, and advanced services, thus fulfilling the needs of enterprises looking to optimize their data management while ensuring compliance with stringent industry regulations. The trajectory for both categories in the US Data Colocation Market demonstrates that the increasing reliance on data-driven strategies will continue to stimulate growth, ultimately contributing to the market's significant expansion in the coming years.As businesses embrace digital transformation, the Deployment Mode segment becomes increasingly relevant in driving industry innovation and addressing evolving customer demands.
The US Data Colocation Market is witnessing substantial growth, driven by increased digital transformation across various industries. The End User segment encapsulates distinct sectors including Banking, Financial Services, and Insurance (BFSI), Healthcare, Government and Defense, IT and Telecom, and Others, each presenting unique needs for data management and storage. The BFSI sector significantly drives demand for reliable data colocation services, prioritizing security and compliance in managing vast customer data and transactions. Similarly, the Healthcare industry relies heavily on colocation to ensure data availability and regulatory compliance, especially in storing sensitive patient information.Government and Defense organizations require robust disaster recovery and data security measures, which bolsters the relevance of data colocation. The IT and Telecom sectors demand high performance and scalability, as they frequently experience rapid growth and innovation. Meanwhile, the Others category encompasses a diverse range of industries, showcasing the versatility and adaptability of the data colocation market to meet varied requirements. Overall, these segments highlight the critical role of colocation in advancing digital infrastructure in the US, driving further market growth and innovation.
The US Data Colocation Market has seen significant growth and intense competition in recent years as businesses increasingly recognize the importance of maintaining secure, efficient, and scalable data storage solutions. As the demand for data storage continues to surge, several key players have emerged, each striving to differentiate their offerings while navigating evolving technological advancements and regulatory challenges. The competitive landscape is characterized by a variety of providers that specialize in different aspects of colocation services, such as data security, redundancy, and energy efficiency, catering to a diverse clientele that includes enterprises, startups, and government entities.
This burgeoning market ecosystem is marked by strategic partnerships, technological innovations, and a focus on sustainability practices that have reshaped how companies think about data access and management.DataBank has established itself as a prominent player within the US Data Colocation Market, known for its strong presence and comprehensive service offerings. The company differentiates itself through its robust infrastructure and commitment to customization, allowing clients to tailor their colocation services to meet unique business needs. DataBank focuses on providing high levels of security, reliability, and scalability, making it an attractive option for organizations looking to expand their operations. Its strategic locations across various metropolitan areas in the United States ensure low-latency access and minimal downtime, which is critical for businesses with time-sensitive operational requirements. Additionally, DataBank’s strong emphasis on customer service and support further solidifies its position as a leader in the colocation sector, enabling it to build long-term relationships with clients in diverse industries.
Iron Mountain has also carved out a significant niche in the US Data Colocation Market, offering a wide range of key products and services that cater to data-driven organizations. With a strong emphasis on data security and compliance, Iron Mountain provides colocation services that prioritize the protection of sensitive information while ensuring regulatory requirements are met. The company's extensive portfolio includes cloud services, disaster recovery solutions, and data management options that seamlessly integrate with its colocation offerings. Iron Mountain's strategic acquisitions and partnerships have bolstered its market presence, enabling it to expand its service capabilities and geographic reach across the United States. The company's commitment to operational excellence, alongside its innovative solutions for data compliance and sustainability, positions it as a formidable competitor within the colocation landscape, attracting a diverse range of clients seeking reliable and secure data storage options.
The US Data Colocation Market has seen notable developments recently, particularly with the significant increase in demand driven by the rapid growth of cloud computing and the need for improved data management solutions. Companies such as Digital Realty and Equinix continue to expand their infrastructures, with Digital Realty recently announcing the development of new data centers in key markets, aiming to accommodate increased bandwidth demands. In terms of mergers and acquisitions, Iron Mountain finalized its acquisition of I/O Data Centers in June 2023, strengthening its position in the market. Additionally, CyrusOne completed its merger with KKR in July 2023, a move projected to enhance its service capabilities. Market growth continues to be bolstered by Flexential and CoreSite Realty, both of which are investing in state-of-the-art facilities to meet customer needs. As per reports, the US market expects a valuation growth to surpass USD 50 billion by 2025, underscoring the increasing criticality of reliable colocation services. Major trends include the ongoing shift toward hybrid cloud solutions and the emphasis on sustainability in data center operations, further influencing investment and operational strategies in the sector.
| Report Attribute/Metric Source: | Details |
| MARKET SIZE 2018 | 11.2(USD Billion) |
| MARKET SIZE 2024 | 12.51(USD Billion) |
| MARKET SIZE 2035 | 42.27(USD Billion) |
| COMPOUND ANNUAL GROWTH RATE (CAGR) | 11.703% (2025 - 2035) |
| REPORT COVERAGE | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| BASE YEAR | 2024 |
| MARKET FORECAST PERIOD | 2025 - 2035 |
| HISTORICAL DATA | 2019 - 2024 |
| MARKET FORECAST UNITS | USD Billion |
| KEY COMPANIES PROFILED | DataBank, Iron Mountain, StackPath, CoreSite Realty, Flexential, Hosting.com, TierPoint, Digital Realty, Equinix, Windstream Wholesale, Mapletree Industrial Trust, Rackspace Technology, CyrusOne, QTS Realty Trust |
| SEGMENTS COVERED | Type, Deployment Mode, End User |
| KEY MARKET OPPORTUNITIES | Increased cloud adoption, Edge computing growth, Hybrid IT demand, Enhanced security requirements, Sustainability initiatives in data centers |
| KEY MARKET DYNAMICS | Increasing data generation, Cloud adoption surge, Regulatory compliance demands, Energy efficiency considerations, Enhanced cybersecurity measures |
| COUNTRIES COVERED | US |
Frequently Asked Questions (FAQ) :
The US Data Center Colocation Market is expected to be valued at 64.85 billion USD by 2035.
The market is anticipated to grow at a CAGR of 13.297 percent during the period from 2025 to 2035.
In 2024, the US Data Center Colocation Market is valued at 16.43 billion USD.
Retail Colocation is projected to be valued at 27.99 billion USD by 2035.
Wholesale Colocation is valued at 9.51 billion USD in 2024.
Key players include Iron Mountain, Equinix, Digital Realty, and CoreSite Realty among others.
Wholesale Colocation is expected to reach 36.86 billion USD by 2035.
Wholesale Colocation is expected to have a larger market share compared to Retail Colocation by 2035.
Increasing data consumption and demand for cloud services are significant growth drivers for the market.
The market size may vary significantly by region, driven by local demand for data center services and infrastructure investments.
Leading companies partner with us for data-driven Insights.
Kindly complete the form below to receive a free sample of this Report
Analyst Explore the profile of garvit vyas, one of our esteemed authors at market research future, and access their expert research contributions in the field of market research and industry analysis
Get in Touch
© 2025 Market Research Future ® (Part of WantStats Reasearch And Media Pvt. Ltd.)
