According to our latest study on "Data Center Colocation Market Size and Forecasts (2021 - 2031), Global and Regional Share, Trends, and Growth Opportunity Analysis - by Type, Enterprise Size, and Industry Vertical" the Data Center Colocation market size was valued at US$ 74.13 billion in 2024 and is expected to reach US$ 182.58 billion by 2031; it is estimated to record a CAGR of 13.7% from 2025 to 2031.

The Data Center Colocation market is segmented into five major regions-North America, Europe, Asia Pacific (APAC), the Middle East & Africa (MEA), and South & Central America. North America dominated the market in 2024, followed by Europe and APAC, respectively.

Middle East and Africa is segmented into Saudi Arabia, UAE, South Africa, and the Rest of MEA. In the Middle East and Africa, colocation adoption is nascent but accelerating, fueled by rising digital infrastructure needs, cloud adoption, and regional energy transformation policies. As of 2024, Africa accounted for less than 1 kWh per capita of data center electricity consumption-an extremely low figure-but projections show strong growth potential, especially in South Africa, where per-capita intensity may reach above 25 kWh by 2030, nearly 15 times the continental average. Key policy drivers include national digital transformation agendas in GCC countries and energy transition frameworks in South Africa. Governments are encouraging data localization, cloud-first strategies, and public-private partnerships to expand colocation infrastructure, increasingly powered by solar and wind energy to support decarbonization targets.

Energy availability and grid reliability remain challenges; many areas lack stable, low-cost baseload power. Providers are increasingly investing in captive renewable generation (solar PV, small-scale wind) and battery storage to support sustainable operations. Water scarcity complicates traditional cooling strategies, making air-cooled systems and liquid-immersion cooling-both of which use less water-more attractive alternatives. International standards and certifications are gaining traction; although adoption is uneven, forward-looking operators are targeting LEED, ISO 50001, and regional green building standards. Sustainability-linked financing is beginning to emerge, supported by development institutions that prioritize clean and resilient digital infrastructure.

South Africa is the most advanced data center colocation market in Africa, supported by the Digital Economy Masterplan and increasing cloud adoption. Johannesburg and Cape Town are key hubs, with the Independent Communications Authority of South Africa (ICASA) promoting infrastructure development. The Protection of Personal Information Act (POPIA) mandates data localization for certain sectors, boosting colocation demand. However, unreliable grid power and frequent load-shedding force operators to rely on diesel generators and renewable energy solutions. The Department of Communications and Digital Technologies is working to improve broadband access, supporting digital growth. Major players such as Teraco (Africa Data Centers) and hyperscalers such as Microsoft Azure and AWS are expanding, with a focus on serving both local enterprises and pan-African connectivity needs.

Key Findings of Data Center Colocation Market Study:

Based on industry vertical, the market is categorized into BFSI, IT and telecom, retail and e-commerce, manufacturing, and others. In the BFSI sector, data security, compliance, and availability are paramount. The global data center colocation market offers a robust infrastructure solution that aligns with these critical requirements. Financial institutions use colocation to ensure service availability, protect sensitive customer data, and comply with regulations such as PCI-DSS, GDPR, and SOX. Colocation provides BFSI organizations with enterprise-grade power, cooling, and physical security, helping reduce downtime risk while maintaining control over IT infrastructure. Furthermore, colocation enables direct connectivity to cloud and fintech ecosystems, enabling digital banking, real-time trading, and advanced data analytics. As financial institutions modernize core systems and adopt hybrid cloud strategies, colocation provides the flexibility to scale while avoiding the high capital expenditure of building proprietary data centers. Globally, colocation hubs in financial centers such as New York, London, and Singapore provide proximity to major exchanges and low-latency network access. In the BFSI sector, colocation serves as a vital enabler of operational continuity, digital innovation, and regulatory compliance.

CoreSite Realty Corporation, CyrusOne Inc, Iron Mountain Inc, Digital Realty Trust Inc, Equinix Inc, Telehouse, NTT Data Corp, International Business Machines Corp, Rittal GmbH & Co KG, and ATandT are among the key players profiled in the Data Center Colocation market report. Several other major players were studied and analyzed during the Data Center Colocation market analysis to get a holistic view of the market and its ecosystem. The Data Center Colocation market also provides detailed market insights, which help the key players strategize their growth. The report includes growth prospects owing to the current Data Center Colocation market trends and their foreseeable impact during the forecast period.

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