North America Data Center Colocation Market is Expected to grow at a robust CAGR of 12.47% through 2030F
The
increasing North America data center colocation market is driven by increased
adoption of cloud computing, demand for scalability and flexibility during the
forecast period 2026-2030F.
According
to TechSci Research report, “North
America Data Center Colocation Market – By Country, Competition Forecast & Opportunities, 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. Cost efficiency and operational
efficiency are significant drivers in the North America Data Center Colocation
market. Maintaining an in-house data center involves substantial capital
expenditures for construction, equipment, and ongoing operational costs,
including power, cooling, and maintenance. Colocation offers a cost-effective
alternative by providing businesses with access to state-of-the-art facilities
and infrastructure without the need for significant upfront investment.
Colocation providers offer managed services and support, reducing
the burden on internal IT teams and improving operational efficiency. The
ability to share resources, such as power and cooling, with other tenants
further enhances cost efficiency. As businesses seek to optimize their IT
expenditures and streamline operations, colocation services present an
attractive solution for achieving these goals.
The
adoption of multi-cloud and hybrid cloud strategies is driving significant
growth in the North American data center colocation market. Organizations are
increasingly leveraging multiple cloud services from different providers to
optimize their IT environments, enhance flexibility, and avoid vendor lock-in.
Colocation providers are playing a crucial role in facilitating these
strategies by offering robust connectivity and interconnection solutions that
enable seamless integration between on-premises infrastructure and various
cloud platforms. This trend is also driven by the need for improved disaster
recovery and business continuity. Colocation facilities provide the necessary
infrastructure to support hybrid cloud environments, ensuring that businesses
can efficiently manage their data and applications across different cloud
environments while maintaining high levels of performance and security.
The
expansion of interconnection services is a key trend in the North American data
center colocation market. As businesses increasingly rely on interconnected
ecosystems of data centers, cloud providers, and network services, the demand
for robust interconnection solutions is growing. Colocation providers are
enhancing their offerings by providing advanced interconnection services that
facilitate high-speed data transfer, network peering, and seamless connectivity
between different IT environments. This trend is driven by the need for
businesses to improve data accessibility, optimize network performance, and
support real-time data exchange. The expansion of interconnection services is
also driven by the growth of digital ecosystems, including partnerships between
data centers, cloud providers, and enterprises. Colocation providers are
investing in advanced networking infrastructure and offering comprehensive
interconnection solutions to meet the needs of businesses seeking to enhance
their connectivity and streamline their IT operations.
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North America Data Center Colocation Market"
Based
on End Use Industry, BFSI dominated in the North America Data Center Colocation
Market in 2024. The BFSI industry is characterized by its massive data requirements
and transaction volumes. Financial institutions handle vast amounts of
sensitive data daily, including transaction records, customer information, and
financial statements. This data needs to be stored securely and processed
efficiently, necessitating high-performance, reliable, and scalable data center
solutions. Colocation services offer the infrastructure required to manage
these substantial data volumes while ensuring high availability and security. Regulatory
compliance is a significant driver for the BFSI sector. Financial institutions
are subject to stringent regulations regarding data security, privacy, and
operational continuity. Colocation providers help these institutions meet
compliance requirements by offering advanced security measures, including
physical security controls, cybersecurity protections, and compliance
certifications. This adherence to regulatory standards is crucial for
maintaining customer trust and avoiding legal repercussions.
The
BFSI industry is increasingly adopting digital transformation strategies,
including cloud computing and big data analytics. Colocation facilities support
these initiatives by providing seamless connectivity to cloud services and
enabling the efficient processing of large datasets. The ability to integrate
with cloud platforms and leverage advanced analytics tools through colocation
services enhances the operational agility and data management capabilities of
financial institutions. Cost efficiency plays a role in the BFSI
sector's preference for colocation. Building and maintaining in-house data
centers can be prohibitively expensive. Colocation offers a cost-effective
alternative by allowing financial institutions to leverage shared
infrastructure while avoiding capital expenditures associated with facility
construction and maintenance.
Based
on country, Canada is the fastest growing country in the North America Data
Center Colocation Market during the forecast period. Canada's favorable
economic and political environment provides a stable foundation for data center
investments. The country’s robust regulatory framework and commitment to data
privacy and security create a conducive environment for colocation providers. Canada’s political stability and transparent business practices
attract international investors and data center operators seeking a reliable
and secure location for their operations. The Canadian market is benefiting
from an increasing demand for data center services driven by digital
transformation and cloud adoption. Canadian businesses, along with
multinational corporations expanding their operations into the country, require
scalable and flexible data center solutions to support their IT infrastructure
needs. The growing adoption of cloud computing, big data analytics, and IoT
(Internet of Things) technologies in Canada drives the need for advanced
colocation facilities that offer high performance and connectivity.
Canada's
competitive advantage in energy costs and sustainability is a significant
factor. The country’s abundant and renewable energy resources, including
hydroelectric power, enable data centers to operate more sustainably and
cost-effectively. This environmental advantage aligns with the increasing focus
on green and energy-efficient data center operations, attracting organizations
seeking to reduce their carbon footprint. Furthermore, the geographic location
of Canada provides strategic benefits, including lower risk of natural
disasters compared to other regions. This geographic stability ensures reliable
data center operations and enhances the attractiveness of Canada as a
destination for colocation services. Canadian cities like Toronto, Vancouver,
and Montreal are emerging as key data center hubs due to their strong
infrastructure, connectivity, and growing tech ecosystems. These cities offer
attractive conditions for data center investments and expansions.
Key
market players in the North America Data Center Colocation market are: -
- 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
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“The
North America Data Center Colocation market presents significant opportunities
driven by growing demand for cloud services, big data, and IoT. Expanding
digital transformation across industries fuels the need for scalable, secure
data center solutions. The shift towards hybrid and multi-cloud
environments creates opportunities for colocation providers to offer integrated
services. Rising focus on sustainability and energy efficiency provides a
chance to develop green data centers. Increasing investments in edge
computing and 5G technology further drive demand for localized colocation
facilities, offering avenues for growth and innovation in the sector.Top of Form” said Mr. Karan Chechi,
Research Director of TechSci Research, a research-based Global management
consulting firm.
“North America Data Center Colocation Market
By Colocation Type (Retail, Wholesale), By Enterprise Size (Large Enterprise,
SMEs), By Tier Level (Tier I, Tier II, Tier III, Tier IV), By Deployment Type
(Cloud, On-Premises), By End Use Industry (BFSI, IT & Telecom, Healthcare,
Government, Retail, Others), By IT Power Capacity (<1MW, 1MW-10MW,
10MW-20MW, >20MW), By Utilized Area (<500 Sq. Ft., 500-5000 Sq. Ft.,
5000-10000 Sq. Ft., >10000 Sq. Ft.), By Utilized Rack (<10, 10-100,
100-200, >200), By Country, Competition, Forecast and Opportunities,
2020-2030F”,
has evaluated the future growth potential of North America Data Center
Colocation Market and provides statistics & information on market
size, structure, and future market growth. The report intends to provide
cutting-edge market intelligence and help decision makers take sound investment
decisions. Besides the report also identifies and analyzes the emerging trends
along with essential drivers, challenges, and opportunities in North America Data
Center Colocation Market.
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