Retail Colocation Market By Solution Type (Rack Space, Cage Space, Cabinet Space, Room Space); By Industry Vertical (IT & Telecom, Banking, Financial Services, and Insurance [BFSI], Healthcare, E-commerce and Retail, Government & Public Sector, Energy, Media & Entertainment, Manufacturing); By Service Type (Managed Hosting Services, Interconnection Services, Cloud Access Services, Security Services, Remote Hands & Eyes Support); By End-User (Cloud Providers, Enterprises [Private Companies], Government Organizations); By Geography, Segment revenue estimation, Forecast, 2024-2032.

The retail colocation market was worth USD 25.5 billion in 2023 and will be worth USD 50.06 billion by 2030, growing at a CAGR of 8.8% during the forecast period.

 

The Retail Colocation market is fueled by the growing need for highly accessible and efficient IT facilities as companies adjust to digitalization and the shift toward the cloud. The international market for data centers is estimated to expand by more than 10% each year, and companies are thus looking for colocation solutions to contain their IT demands while avoiding the construction and maintenance of their own data centers. For instance, increased amounts of data are generated in sectors such as e-commerce and online services, which forces companies to seek retail collocation services to increase network performance and decrease latency. In 2023, Equinix extended its data center space in Germany, particularly Frankfurt, because of the increasing number of end users who migrated to hybrid cloud models. Such expansion initiatives to provide higher-speed connectivity and more versatile architecture underscore the emerging focus on colocation services because the market emphasizes digitization and efficient cost structures.

 

The Retail Colocation market is poised for growth as end-users continue to differentiate their IT environments through hybrid and multi-cloud models built on the need for flexible and secure solutions. The world hybrid cloud market is anticipated to increase by more than 20% per annum, thus generating strong interest in colocation solutions that enable connections to various clouds and data centers. Digital Realty Even expanded its facility footprint in Asia-Pacific in 2023 by opening up data centers in Singapore to target enterprises that demand secure, low-latency connections to the key cloud service providers. This expansion will help provide growing companies with the necessary scale infrastructure for their digital and cloud needs with the added compliance and security they need. Retailing colocation is also supported by the tendency toward increasing digitalization around the globe, as well as the demand for reliable connections in new markets.

 

 

Market Segmentation

By Solution Type:

• Rack Space

• Cage Space

• Cabinet Space

• Room Space

 

By Industry Vertical:

• IT & Telecom

• Banking, Financial Services, and Insurance (BFSI)

• Healthcare

• E-commerce and Retail

• Government & Public Sector

• Energy

• Media & Entertainment

• Manufacturing

 

By Service Type:

• Managed Hosting Services

• Interconnection Services

• Cloud Access Services

• Security Services

• Remote Hands & Eyes Support

 

By End-User:

• Cloud Providers

• Enterprises (Private Companies)

• Government Organizations

 

By Region

North America

• US

• Mexico

• Canada

• Rest of North America

 

Europe

• Switzerland

• Russia

• France

• Germany

• U.K

• Finland

• Turkey

• Netherlands

• Belgium

• Spain

• Italy

• Rest of Europe

 

Asia Pacific

• India

• China

• South Korea

• Japan

• Singapore

• Thailand

• Indonesia

• Malaysia

• Philippines

• Australia

• Rest of Asia-Pacific

 

LAMEA

• Brazil

• Argentina

• Uruguay

• Saudi Arabia

• Rest of LAMEA

 

Segment Analysis for the Retail Colocation Market

By Solution Type:

Leading Segment: Room Space

Room space colocation solutions dominate the market, holding a share of over 40%. Large enterprises & government organizations prefer room space colocation for enhanced security & operational control. For instance, Equinix and Digital Realty provide fully enclosed room space solutions to financial institutions for hosting critical infrastructure. With the increasing adoption of hybrid IT infrastructure, the segment is expected to maintain a stable growth rate of 8.5% CAGR.

Fastest-Growing Segment: Rack Space

Rack space colocation is experiencing the fastest growth, with a CAGR of 12%, driven by the demand from SMEs & cloud providers looking for cost-effective and scalable solutions. With rising adoption in Asia Pacific and North America, companies like Cyxtera and NTT are expanding their rack space offerings to cater to AI-driven workloads and edge computing.

 

By Industry Vertical:

Leading Segment: IT & Telecom

IT and Telecom account for 35% of the market share, driven by the robust expansion of cloud computing, 5G, and data-heavy applications. Companies like Amazon Web Services (AWS), Microsoft Azure & Google Cloud rely heavily on retail colocation providers for scaling their data centers while maintaining redundancy.

Fastest-Growing Segment: E-commerce & Retail

The e-commerce and retail sector is growing at a CAGR of 13%, fueled by increased demand for online shopping and digital payments. Global players like Shopify, Alibaba, and Walmart are investing in colocation facilities to improve website performance, reduce latency, and manage large volumes of consumer data during peak shopping seasons like Black Friday and Singles’ Day.

 

By Service Type:

Leading Segment: Managed Hosting Services

Managed hosting services dominate with a market share of 38%, as enterprises prefer outsourcing data center management to focus on their core business. Providers like Equinix & Rackspace offer managed services, including infrastructure monitoring, cybersecurity & cloud migration.

Fastest-Growing Segment: Interconnection Services

Interconnection services are expanding at a CAGR of 14%, driven by increased data traffic & the need for secure connectivity between enterprises & cloud providers. Equinix's Cross Connect and Megaport's elastic cloud interconnection services have witnessed rising adoption due to multi-cloud strategies & data localization requirements.

 

By End-User:

Leading Segment: Cloud Providers

Cloud providers account for over 40% of retail colocation demand, as hyperscalers expand their infrastructure to meet increasing cloud service adoption. Amazon, Microsoft, and Google are heavily investing in colocation data centers to deploy edge nodes and content delivery networks (CDNs).

Fastest-Growing Segment: Enterprises (Private Companies)

Private enterprises are growing at a CAGR of 12%, driven by the need for hybrid IT solutions and regulatory compliance. Industries such as BFSI, healthcare & retail are increasingly shifting workloads to colocation centers instead of building expensive on-premise data centers.

 

By Region:

Leading Region: North America

North America holds 40% of the market share, with the U.S. leading due to the presence of major colocation providers like Digital Realty, Equinix, and CoreSite. The demand is driven by the proliferation of cloud computing, AI-driven applications, and data localization regulations.

Fastest-Growing Region: Asia Pacific

Asia Pacific is witnessing the highest growth, with a CAGR of 14%, driven by increasing digitalization in India, China, and Southeast Asia. Companies like Alibaba Cloud, Tencent, and STT GDC are expanding colocation facilities to support the rapid adoption of cloud services and edge computing in the region.

 

Key Players

• Equinix, Inc.

• Digital Realty Trust, Inc.

• NTT Communications Corporation

• CyrusOne Inc.

• China Telecom Global Limited

• Iron Mountain Incorporated

• Cyxtera Technologies

• CoreSite Realty Corporation

• Global Switch Holdings Ltd.

• Telehouse (KDDI Corporation)

 

Retail Colocation Market Report Coverage

Report Attribute	Details
Forecast Period	2023 – 2030
Market Size Value in 2023	USD 25.5 billion
Revenue Forecast in 2030	USD 50.06 billion
Overall Growth Rate	CAGR of 8.8%
Base Year for Estimation	2022
Historical Data	2017 – 2021
Unit	USD Billion, CAGR (2023 - 2030)
Segmentation	By Solution Type, By Industry Vertical, By Service Type, By End-User, By Region
By Solution Type	Rack Space, Cage Space, Cabinet Space, Room Space
By Industry Vertical	IT & Telecom, Banking, Financial Services, and Insurance (BFSI), Healthcare, E-commerce and Retail, Government & Public Sector, Energy, Media & Entertainment, Manufacturing
By Service Type	Managed Hosting Services, Interconnection Services, Cloud Access Services, Security Services, Remote Hands & Eyes Support
By End-User	Cloud Providers, Enterprises (Private Companies), Government Organizations
By Region	North America, Europe, Asia Pacific, LAMEA
Country Scope	US, Mexico, Canada, Germany, UK, France, China, Japan, India, etc.
Pricing and Purchase Options	Avail customized purchase options to meet your exact research needs.