IMARC Group has recently released a new research study titled “United States Data Center Colocation Market Report by Type (Retail Colocation, Wholesale Colocation), Organization Size (Small and Medium-sized Enterprises, Large Enterprises), End Use Industry (BFSI, Manufacturing, IT and Telecom, Energy, Healthcare, Government, Retail, Education, Entertainment and Media, and Others), and Region 2025-2033”, offers a detailed analysis of the market drivers, segmentation, growth opportunities, trends and competitive landscape to understand the current and future market scenarios.
Market Overview
The United States data center colocation market size reached USD 13.9 Billion in 2024 and is forecasted to expand to USD 25.2 Billion by 2033. This growth reflects a compound annual growth rate (CAGR) of 6.8% during the forecast period 2025-2033. The market is driven by the increasing need for flexible, scalable IT infrastructure solutions adapting to evolving business demands and technological advancements.
Study Assumption Years
● Base Year: 2024
● Historical Year/Period: 2019-2024
● Forecast Year/Period: 2025-2033
United States Data Center Colocation Market Key Takeaways
● Current Market Size (2024): USD 13.9 Billion
● CAGR (2025-2033): 6.8%
● Forecast Period: 2025-2033
● Market growth is powered by expanding cloud adoption, rising data consumption, and the need for scalable infrastructure solutions that minimize capital expenditure.
● There's a significant trend toward hybrid and multi-cloud environments which enhance connectivity and workload management.
● The market sees geographic expansion driven by edge computing deployments responding to demand for low-latency applications.
● Efficiency improvements in power and cooling technologies are crucial for supporting high-density computing demands and sustainability goals.
● Regulatory compliance and energy management remain challenges, while opportunities exist in green energy and AI-ready infrastructure deployments.
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United States Data Center Colocation Market Growth Factors
The United States data center colocation market growth is driven by the rapid adoption of cloud computing and the surge in data generation, prompting enterprises to seek scalable, cost-efficient IT infrastructure that reduces capital expenditure while improving operational efficiency through shared colocation facilities.
The most common form of hybrid or multi-cloud architecture is the multi-cloud hybrid environment that takes advantage of colocation facilities to reduce latency, rapidly scale workloads, and provide adequate public cloud on-ramps in many locations globally. In this architecture, organizations can diversify workloads, keep sensitive data secure and internal, and utilize the cloud for less-sensitive workloads.
Another driver is the expansion of edge deployment locations, as colocation facilities build out in secondary and tier 2 or tier 3 cities to support the expansion of latency-sensitive applications including self-driving cars, video streaming and the Internet of Things. Such edge deployments enable scalable and resilient local compute services to respond to demand from industries such as 5G, smart infrastructure, and engaging digital products and services.
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United States Data Center Colocation Market Segmentation
Breakup By Type:
● Retail Colocation: Facilities where clients lease space and equipment tailored to their needs, providing flexibility and service diversity.
● Wholesale Colocation: Larger-scale spaces leased usually to enterprises requiring significant infrastructure capacity and customized solutions.
Breakup By Organization Size:
● Small and Medium-sized Enterprises: Businesses with moderate infrastructure requirements relying on colocation for scalable IT solutions.
● Large Enterprises: Corporations with extensive data center needs benefiting from colocation to optimize operational efficiency and capital expenses.
Breakup By End Use Industry:
● BFSI: Banking, Financial Services, and Insurance sector utilizing colocation for secure, reliable data handling and regulatory compliance.
● Manufacturing: Industrial sector leveraging colocation for operational continuity and data management.
● IT and Telecom: Technology firms and telecommunications providers requiring scalable infrastructure and high connectivity.
● Energy: Utilities and energy companies deploying colocation to enhance data processing capabilities.
● Healthcare: Medical institutions relying on colocation for data security and efficient patient information management.
● Government: Public sector use of colocation for secure and compliant data center services.
● Retail: Retailers utilizing colocation to support e-commerce platforms and data analytics.
● Education: Academic institutions adopting colocation for research data and administrative systems.
● Entertainment and Media: Content providers requiring high-performance infrastructure for streaming and data services.
● Others: Various other industries employing colocation services for diverse data management needs.
Breakup By Region:
● Northeast
● Midwest
● South
● West
Recent Developments & News
In July 2025, a $440 million colocation data center project was launched in Bastrop County, Texas, as part of a $1.44 billion multi-building complex, intended to support growing enterprise and AI infrastructure demands nationwide. Also in July 2025, Nebius announced a phased 300MW data center development in New Jersey and solidified a colocation deployment in Keflavik, Iceland through Switch. Both the Icelandic, geothermal-powered facility and the Kansas City expansion were scheduled to be operational by Q2 2025, helping Nebius achieve a 100MW installed capacity by year-end.
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Competitive Landscape
The market research report covers a comprehensive competitive landscape analysis including market structure, key player positioning, winning strategies, competitive dashboards, and company evaluation quadrants. Detailed profiles of all major companies have been provided.
If you require any specific information that is not covered currently within the scope of the report, we will provide the same as a part of the customization.
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