US Data Center Colocation Market
US Data Center Colocation Market by Service Type (Traditional and Managed), Service Scale (Retail and Wholesale), Workload Type (General Purpose IT and HPC & AI), End User (Enterprises and Hyperscalers) with Impact of AI/Gen-AI - Forecast to 2030
OVERVIEW
Source: Secondary Research, Interviews with Experts, MarketsandMarkets Analysis
The data center colocation market in the US is projected to grow from USD 38.80 billion in 2025 to USD 65.45 billion by 2030, reflecting an 11.0% CAGR. Growth is mainly due to increased workload deployments as a result of AI, as well as expansion of hyperscale cloud regional sites, both of which require greater power density and advanced cooling capabilities for optimal performance. As of the first half of 2025, the top markets for colocation in the US have a combined total of 5,242.5 MW under construction, indicating that there continues to be sustained momentum for investment in each of these large colocation markets. The Northern Virginia market continues to be the state with the most significant concentration of capacity at 2,078.2 MW due to the continuing availability of power and extensive connectivity, coupled with strong demand for colocation services from enterprises.
KEY TAKEAWAYS
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US Data Center Colocation Market, By Service ScaleThe wholesale colocation segment is projected to register a higher CAGR (13.9%) than the retail colocation segment.
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US Data Center Colocation Market, By Service TypeThe managed colocation is projected to register a higher CAGR (17.2%) than the traditional colocation segment.
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US Data Center Colocation Market, By Workload TypeThe HPC & AI segment is projected to exhibit a higher grate rate (26.3%) than the generatl purpose IT segment.
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US Data Center Colocation Market, By End UserThe hyperscalers segment is expected to witness significant growth.
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US Data Center Colocation Market, By Organization SizeThe large enterprises segment is projected to grow at a higher rate than the SMEs segment.
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US Data Center Colocation Market, By Enterprise VerticalManufacturing is estimated to be the fastest-growing enterprise vertical segment in the US data center colocation market.
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Competitive LandscapeEquinix, Digital Realty, and NTT Data lead the US market through dense interconnection and AI-ready campuses.
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Competitive LandscapeCtrlS, BDx, and AirTrunk are expanding rapidly in the US through high-density, regulation-aligned campus developments.
The data center colocation market in the US is shifting as enterprises move toward scalable, high-density infrastructure to support cloud, AI, and data-intensive workloads. Demand is strongest from hyperscale and large enterprise customers that require reliable power, dense interconnection, and rapid deployment. Operators are responding by developing high-power, energy-efficient campuses designed for compliance, resilience, and long-term growth, making colocation a core enabler of enterprise digital strategy.
TRENDS & DISRUPTIONS IMPACTING CUSTOMERS' CUSTOMERS
As AI adoption accelerates, the data center colocation market in the US is expected to face structural disruption due to rising pressure on power availability and cooling capacity. High-density GPU deployments are driving adoption of liquid cooling, direct-to-chip cooling, and rear-door heat exchangers, which is reshaping facility design and capital planning. Grid access constraints and extended permitting timelines are projected to influence site selection decisions and slow capacity delivery across major colocation hubs. Expanding edge deployments and stricter data sovereignty requirements are anticipated to accelerate distributed colocation models that prioritize localized processing and regional operations.
Source: Secondary Research, Interviews with Experts, MarketsandMarkets Analysis
MARKET DYNAMICS
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Surging demand for AI-ready, high-density colocation capacity
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Rapid expansion of cloud-adjacent and hyperscale colocation campuses
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Power delivery constraints and extended utility interconnection timelines
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Escalating construction costs and long equipment lead times
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Growing enterprise adoption of hybrid, multicloud interconnection ecosystems
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Rising demand for liquid-cooled and next-generation colocation facilities
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Retrofitting legacy data centers to support high-density AI workloads
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Severe shortage of skilled labor for advanced data center construction and operations
Source: Secondary Research, Interviews with Experts, MarketsandMarkets Analysis
Driver: Surging demand for AI-ready, high-density colocation capacity
AI training and inference deployments are increasing demand for high-density colocation in the US. Some of the major growth areas include Northern Virginia, Dallas, Phoenix, and Silicon Valley. Buyers are prioritizing high-power racks and scalable power blocks with low-latency connectivity to cloud platforms and regional networks
Restraint: Power delivery constraints and extended utility interconnection timelines
Power availability is one of the major hurdles for colocation markets in the US. Delays in utility interconnections, substation upgrades, and permitting requirements are leading to a rise in capital exposure and delayed revenue realization. They can also limit near-term capacity for power-intensive AI deployments.
Opportunity: Growing enterprise adoption of hybrid and multicloud interconnection ecosystems
Enterprises increasingly use colocation as an interconnection hub between on-premises infrastructure and public cloud platforms. Network providers also anchor these ecosystems. This supports demand for carrier-dense and cloud-adjacent campuses. It also enables low-latency data exchange and workload portability. These requirements make interconnection-focused colocation a durable growth opportunity.
Challenge: Retrofitting legacy data centers to support high-density AI workloads
A large share of installed colocation capacity was built for lower-density enterprise workloads. Upgrading sites for higher power densities often necessitates significant electrical and mechanical modifications. Liquid-cooling readiness can also require structural modifications. These retrofit programs increase capital intensity and execution risk. Risk is higher when upgrades occur in active production environments.
US DATA CENTER COLOCATION MARKET: COMMERCIAL USE CASES ACROSS INDUSTRIES
| COMPANY | USE CASE DESCRIPTION | BENEFITS |
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Digital Realty worked with SAP to quickly grow SAP's global cloud infrastructure across more than 150 countries. SAP's own proprietary data centers were both slow and costly to expand, resulting in delays ranging from 12 to 24 months for deployment. SAP sought a colocation partner that could grow quickly, provide a global footprint, and offer flexibility in supporting hybrid models, sustainability goals, and generative AI workloads. | 6× faster infrastructure scaling (18 months → 3 months) | Centralized global vendor engagement | 99.999% uptime | Green-certified deployments using 100% renewable energy | Faster cloud expansion across three continents | Improved operational flexibility and sustainability alignment. |
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BMW partnered with NTT Data to improve and automate its global colocation and network environment, supporting over 30,000 servers and approximately 1,000 WANs. BMW was looking for a very stable and independent global network operations with a cloud-based architecture that provides a "cloud-ready" architecture to minimize any interruptions and follow the strictest processes and security standards. | 85% faster server deployments | 99% accuracy in diagnosing issues | Reduced manual IT workloads | Improved service quality | Seamless integration of cloud-ready on-prem systems | Enhanced operational stability across 30,000+ servers and 40,000 network devices. |
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CBS Interactive worked with Iron Mountain to replace an older colocation option that was not able to handle traffic spikes in the range of 15-18 GB/sec with a newer colocation option providing a scalable, energy-efficient solution that would provide 100% uptime, while allowing them to efficiently support applications used by their customers and meeting specific SLA requirements. | State-of-the-art high-density colocation | 100% uptime SLA | Two-thirds reduction in colocation costs | Improved cooling through sealed racks and ultrasonic humidification | Enhanced energy efficiency | Disaster-resilient Phoenix facility optimized for long-term IT stability. |
Logos and trademarks shown above are the property of their respective owners. Their use here is for informational and illustrative purposes only.
MARKET ECOSYSTEM
The data center colocation market in the US consists of two key operator categories: Carrier-Neutral providers, offering flexible interconnection across multiple networks, and Carrier-Owned providers, delivering colocation integrated with their telecom infrastructure. Together, they support enterprise connectivity, scalability, and distributed digital infrastructure growth.
Logos and trademarks shown above are the property of their respective owners. Their use here is for informational and illustrative purposes only.
MARKET SEGMENTS
Source: Secondary Research, Interviews with Experts, MarketsandMarkets Analysis
US Data Center Colocation Market, By Service Scale
Retail colocation is the largest service-scale segment in the US. Enterprises favor flexible rack-level deployments. Predictable pricing supports cost control. Dense interconnection ecosystems improve cloud and network access. Rapid deployment timelines support hybrid-cloud strategies, reinforcing retail colocation as the preferred operating model.
US Data Center Colocation Market, By Service Type
Traditional colocation remains the dominant service type in the US. Enterprises continue to rely on cabinet, cage, and power-based provisioning. Familiar operating models simplify management. Strong control and compatibility with legacy systems sustain demand from industries with stable and predictable workloads.
US Data Center Colocation Market, By End User
Enterprises account for the largest end-user segment in the US data center colocation market. Ongoing digital transformation is a primary driver of demand. Hybrid-cloud expansion is increasing infrastructure complexity. Rising compliance requirements are reinforcing the need for secure environments. Demand for scalable and cost-efficient infrastructure continues to strengthen enterprise reliance on colocation services.
US Data Center Colocation Market, By Organization Size
Large enterprises lead colocation adoption in the US. They operate workloads across multiple regions. Governance and resiliency requirements are high. Larger IT budgets support sustained capacity investment. Continuous hybrid-cloud expansion makes large enterprises the primary revenue contributors.
US Data Center Colocation Market, By Workload Type
General-purpose IT is the largest workload category. ERP, CRM, analytics, and storage migrations drive demand. Hybrid compatibility and steady compute requirements sustain dominance.
US Data Center Colocation Market, By Enterprise Vertical
IT & ITeS is the leading enterprise vertical. Cloud consumption is high. Digital services scale rapidly. Strong uptime, interconnection density, and scalable compute drive revenue leadership.
REGION
US DATA CENTER COLOCATION MARKET: COMPANY EVALUATION MATRIX
The Company Evaluation Matrix categorizes colocation vendors into four distinct quadrants based on their market position and respective capabilities. Equinix is clearly the standout for the Stars quadrant as it has a very strong market presence and the largest portfolio of colocation service offerings. China Telecom is in the Emerging Leaders quadrant, while the remainder of the US vendors exist within the Participants and Pervasive Players quadrants and represent varying levels of scale and execution capabilities.
Source: Secondary Research, Interviews with Experts, MarketsandMarkets Analysis
KEY MARKET PLAYERS
- Equinix (US)
- Digital Realty (US)
- NTT Data (Japan)
- QTS Data Centers (US)
- KDDI Corporation (Japan)
- Iron Mountain (US)
- China Telecom Corporation Ltd. (China)
- CyrusOne (US)
- CenterSquare (US)
- Vantage Data Centers (US)
- DataBank (US)
- EdgeConneX (US)
- Switch (US)
- CoreSite (US)
- Aligned Data Centers (US)
MARKET SCOPE
| REPORT METRIC | DETAILS |
|---|---|
| Market Size in 2025 (Value) | USD 38.80 Billion |
| Market Forecast in 2030 (Value) | USD 65.44 Billion |
| Growth Rate | CAGR of 11.0% from 2025 to 2030 |
| Years Considered | 2020–2030 |
| Base Year | 2024 |
| Forecast Period | 2025–2030 |
| Units Considered | Value (USD Billion) |
| Report Coverage | Revenue forecast, company ranking, competitive landscape, vendor positioning, segment-wise analysis, regional trends, technological developments, key commercial use cases, and growth factors. |
| Segments Covered |
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WHAT IS IN IT FOR YOU: US DATA CENTER COLOCATION MARKET REPORT CONTENT GUIDE
DELIVERED CUSTOMIZATIONS
We have successfully delivered the following deep-dive customizations:
| CLIENT REQUEST | CUSTOMIZATION DELIVERED | VALUE ADDS |
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| Cloud Service Provider |
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| Telecom Operator (Edge Deployments) |
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| Enterprise (IT, BFSI, Retail, Manufacturing) |
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RECENT DEVELOPMENTS
- November 2025 : Digital Realty deepened its collaboration with NVIDIA by hosting the NVIDIA AI Factory Research Center at its Manassas, Virginia campus. The initiative focuses on AI factory blueprints, advanced liquid cooling, and power-efficiency innovations, positioning Digital Realty’s global colocation platform as a testbed for next-generation AI-optimized data center designs.
- October 2025 : Centersquare acquired 10 colocation data centers in the US and Canada for USD 1 billion using cash on hand. The transaction expands capacity in Dallas, Boston, Minneapolis, Tulsa, Nashville, Raleigh, Toronto, and Montreal.
- October 2025 : Vantage Data Centers, with OpenAI and Oracle, announced a Stargate campus in Port Washington, Wisconsin. Vantage plans to invest over USD 15 billion. The campus targets 1 GW of AI capacity by 2028. The project uses zero-emission energy matching and closed-loop liquid cooling.
- October 2025 : CoreSite reached a major construction milestone for its DE3 data center in Denver. The 180,000 square foot facility will interconnect with DE1 and DE2. Availability is targeted for 2026. The campus is planned to scale toward 60 MW and includes local community investment commitments.
Table of Contents
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Methodology
This research study on the US Data Center Colocation Market involved extensive secondary sources, directories, IEEE Communication-Efficient: Algorithms and Systems, International Journal of Innovation and Technology Management, and paid databases. Primary sources were mainly industry experts from the core and related industries, preferred data center colocation service providers, third-party service providers, consulting service providers, end users, and other commercial enterprises. In-depth interviews were conducted with primary respondents, including key industry participants and subject matter experts, to obtain and verify critical qualitative and quantitative information and assess the market’s prospects.
Secondary Research
In the secondary research process, various sources were referred to identify and collect information for this study. Secondary sources included annual reports, press releases, and investor presentations of companies; white papers, journals, and certified publications; and articles from recognized authors, directories, and databases. The data was also collected from other secondary sources, such as journals, government websites, blogs, and vendors’ websites. Additionally, the data center colocation spending of various countries was extracted from the respective sources.
Primary Research
In the primary research process, various primary sources from the supply and demand sides were interviewed to obtain qualitative and quantitative information on the market. The primary sources from the supply side included various industry experts, such as Chief Experience Officers (CXOs), Vice Presidents (VPs), and directors specializing in business development, marketing, and data center colocation service providers. It also included key executives from data center colocation vendors, system integrators (SIs), professional service providers, industry associations, and other key opinion leaders.
Market Size Estimation
Multiple approaches were adopted to estimate and forecast the US Data Center Colocation Market. The first approach involved estimating the market size by companies’ revenue generated through the sale of data center colocation services.
The top-down approach prepared an exhaustive list of all the vendors offering products in the US Data Center Colocation Market. The revenue contribution of the market vendors was estimated through annual reports, press releases, funding, investor presentations, paid databases, and primary interviews. Each vendor’s offerings were evaluated based on platform, degree of customization, type, application, end user, and region. The markets were triangulated through primary and secondary research. The primary procedure included extensive interviews for key insights from industry leaders, such as CIOs, CEOs, VPs, directors, and marketing executives. The market numbers were further triangulated with the existing MarketsandMarkets’ repository for validation.
In the bottom-up approach, the adoption rate of data center colocation services among different verticals in key countries concerning their regions contributing the most to the market share was identified. For cross-validation, the adoption of data center colocation services among enterprises, along with different use cases for their regions, was identified and extrapolated. Weightage was given to use cases identified in different areas for the market size calculation.
Based on the market numbers, the regional split was determined by primary and secondary sources. The procedure included an analysis of the US Data Center Colocation Market’s regional penetration. Based on secondary research, the regional spending on Information and Communications Technology (ICT), socioeconomic analysis of each country, strategic vendor analysis of major data center colocation providers, and organic and inorganic business development activities of regional and global players were estimated.
Data Triangulation
After determining the overall market size using the market size estimation processes as explained above, the market was split into several segments and subsegments. Data triangulation and market breakup procedures were employed, wherever applicable, to complete the overall market engineering process and arrive at the exact statistics of each market segment and subsegment. The overall market size was then used in the top-down procedure to estimate the size of other individual markets via percentage splits of the market segmentation.
Market Definition
The US Data Center Colocation Market refers to the segment where businesses rent space, power, cooling, and connectivity within third-party data center facilities to host their own servers, storage, and networking equipment. Colocation providers offer physical security, redundant power and cooling systems, and access to multiple network carriers, allowing different enterprises to operate in a shared yet secure environment while maintaining control over their infrastructure. This model enables companies to reduce capital expenditures, improve uptime and scalability, and meet compliance requirements more effectively. The market is expanding due to the rising adoption of cloud computing, big data analytics, and IoT, along with a growing emphasis on modular infrastructure and sustainable operations.
Stakeholders
- Data center colocation service providers
- Hyperscalers & Cloud service providers
- Networking companies
- Information technology (IT) infrastructure providers
- Consultants/Consultancies/Advisory firms
- Component providers
- Telecom service providers
- System integrators (SIs)
- Support and maintenance service providers
- Support service providers
- Third-party providers
- Government organizations and standardization bodies
- Datacenter providers
- Regional associations
- Independent hardware and software vendors
- Value-added resellers and distributors
Report Objectives
- To define, describe, and forecast the US Data Center Colocation Market based on service type, service scale, workload type, organization size, end user, and region
- To forecast the market size of the five major regional segments: North America, Europe, Asia Pacific, Middle East & Africa, and Latin America
- To provide detailed information related to the major factors influencing the growth of the market (drivers, restraints, opportunities, and challenges)
- To strategically analyze macro and micro markets concerning growth trends, prospects, and their contribution to the overall market
- To analyze industry trends, patents and innovations, and pricing data related to the market
- To analyze the opportunities in the market for stakeholders and provide details of the competitive landscape for major players
- To profile key players in the market and comprehensively analyze their market share/ranking and core competencies
- To track and analyze competitive developments, such as mergers & acquisitions, product developments, and partnerships & collaborations in the market
Available Customizations
With the given market data, MarketsandMarkets offers customizations to meet the company’s specific needs. The following customization options are available for the report:
Product Analysis
- The product matrix provides a detailed comparison of each company’s product portfolio.
Geographic Analysis as per Feasibility
- Further breakup of the North American US Data Center Colocation Market
- Further breakup of the European market
- Further breakup of the Asia Pacific market
- Further breakup of the Middle East & Africa market
- Further breakup of the Latin American US Data Center Colocation Market
Company Information
- Detailed analysis and profiling of additional market players (up to five)
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Growth opportunities and latent adjacency in US Data Center Colocation Market