The "U.S. Data Center Colocation Market - Industry Outlook & Forecast 2024-2029" report has been added to ResearchAndMarkets.com's offering.

The U.S. Data Center Colocation Market was valued at USD 12.40 billion in 2023, and is projected to reach USD 26.95 billion by 2029, rising at a CAGR of 13.81%.

The U.S. data center colocation market is poised for significant growth, driven by the rapid digitalization of businesses and rising investments from colocation, cloud, Internet, and telecommunication providers. Key telecom companies such as AT&T, T-Mobile, CenturyLink, and Qualcomm are leading the deployment of 5G services and setting the stage for the gradual adoption of the 6G spectrum in the country.

Despite its growth potential, the market faces several challenges. Supply chain disruptions, increasing inflation, a skilled workforce shortage, and power constraints present ongoing obstacles. Core submarkets are further limited by land and power availability, restricting new entrants. However, emerging submarkets like Aurora and Elk Grove Village are gaining preference as alternatives.

The United States remains one of the most expensive regions for developing data center facilities, with average costs ranging from $10 to $11 million per MW and a projected annual increase of 5-7%. Texas, in particular, is a highly competitive market, with numerous colocation operators actively developing new facilities within the state.

MARKET OPPORTUNITIES & TRENDS

Edge Data Centers & the Advent of the 6G Era

The U.S. is one of the fastest-growing countries in terms of technological development and innovations. The upcoming sixth-generation (6G) networks are anticipated to bring advanced networking technologies to make implementing the Industrial Internet of Things (IIoT) easier. These improved networks will offer enhanced connectivity and capabilities, simplifying the integration of IoT into different industries and making it more accessible for businesses to utilize its benefits.

Sustainability Initiatives by Colocation Operators

Colocation companies nationwide are passionate about renewable energy and curtailing their carbon emissions as much as possible to achieve their ambitious sustainability targets. Operators plan to reduce harm to the planet by using clean energy sources instead of traditional fossil fuels that are being depleted at an alarming rate. This change is part of a larger trend in the industry to adopt renewable power sources, such as solar and wind power, to run data centers and power other associated infrastructure.

Colocation Demand Revolutionized by AI & VR

Artificial intelligence (AI) and virtual reality (VR) drive the U.S. data center colocation market growth. There is a need for dependable and scalable data center infrastructure as AI and VR gain traction across different industries. Colocation providers experience a significant increase in demand as businesses look for reliable hosting solutions to accommodate their AI and VR applications, ensuring top-notch performance and seamless connectivity.

Colocation Data Center Facilities on the Rise

The market saw a surge in the development of data center facilities. Key colocation operators include Equinix, Digital Realty, Aligned Data Centers, CyrusOne, QTS Realty Trust, NTT DATA, STACK Infrastructure, Vantage Data Centers, DataBank, Switch, and Compass Datacenters. The U.S. data center colocation market also saw several new entrants, including Tract, Crane Data Centers, Corscale Data Centers, Rowan Digital Infrastructure, Edged Energy, and other operators.

GEOGRAPHICAL ANALYSIS

• Data center operators are keenly interested in the Southeastern, especially in Virginia. They make substantial investments to expand their presence and industry share in the area.
• Data center operators see the Midwestern U.S. as a major hotspot. They build facilities in prime locations, such as Illinois, Iowa, Nebraska, and Ohio, to take advantage of the region's potential.
• The Western U.S. region is a full-grown colocation market that includes Oregon, Idaho, Utah, and California. These states are home to numerous data center facilities offering colocation services to businesses and organizations in the area.
• The U.S. data center colocation market is projected to experience substantial growth in New York, New Jersey, Pennsylvania, and Connecticut, which will improve connectivity in the northeastern US.
• The data center space will likely increase in three key locations that are major data center hubs: Phoenix, Arizona, and Northern Virginia. These regions are major data center locations, attracting substantial investments and attention from colocation providers.

VENDOR LANDSCAPE

• Both wholesale and retail colocation vendors are expected to thrive due to increased demand in the market - various sectors, such as the BFSI, IT, telecom, and cloud, demand colocation services.
• This rise in colocation operators will likely result in strong competition. The competition will lead to many options for clients seeking colocation services.
• The U.S. data center colocation market has the presence of all the major global colocation operators, such as Equinix, Digital Realty, QTS Realty Trust, CyrusOne, Aligned Data Centers, DataBank, Iron Mountain, Vantage Data Centers, NTT DATA, STACK Infrastructure, and others.
• Despite the existence of most major data center operators across the country, several new companies have developed significant data center campuses in the Northern Virginia area. PowerHouse Data Centers and Corescale Data Centers have developed colossal facilities across Virginia.
• Skybox Datacenters is among the major operators in the Texas data center market, developing several data center campuses and facilities across the market. The company has developed facilities in partnership with Prologis and Bandera Ventures.
• Tract, Corscale Data Centers, Crane Data Centers, Edged Energy, Rowan Digital Infrastructure, NE Edge, and Quantum Loophole are some of the new players in the U.S. data center colocation market. These players will likely disrupt the market share and further bolster the competition level.

KEY QUESTIONS ANSWERED

• How big is the U.S. data center colocation market?
• What is the growth rate of the U.S. data center colocation market?
• What are the key trends in the U.S. data center colocation market?
• How many MW of power capacity is expected to reach the U.S. data center colocation market by 2029?
• What is the estimated market size in terms of area in the U.S. data center colocation market by 2029?

Key Attributes:

Premium Insights

Market Opportunities & Trends

• Edge Data Centers & the Advent of the 6G Era
• Planet-Positive Initiatives by Colocation Operators
• Colocation Demand Revolutionized by AI & VR
• Rise in Rack Power Density
• AI & HPC Workloads Boosting Liquid Immersion & Direct-To-Chip Cooling Adoption

Market Growth Enablers

• Tax-based Relief and Other Incentives Bolstering Data Center Development
• Colocation Facilities Sky-Rocket
• All About Mergers, Acquisitions, and Joint Ventures in the Data Center Market
• Expanding Subsea Cables for Better Connectivity
• The Big Data and IoT Revolution

Market Restraints

• Power Challenges Crippling Data Center Operations
• Hindrances in the Supply Chain System
• Rising Carbon Emissions - the Planet's Foe
• Discriminatory Practices and Other Workforce-Related Issues
• Security Issues Impacting Data Center Growth

Market Snapshot

• Historical Data Center Colocation Market
• Global Data Center Colocation Market Comparison
• US Data Center Colocation Vendors' Spectrum

Report Coverage

• Market Segmentation by Colocation Type
• Market Segmentation by Infrastructure
• Market Segmentation by Electrical Infrastructure
• Market Segmentation by Mechanical Infrastructure
• Market Segmentation by Cooling System
• Market Segmentation by Cooling Technique
• Market Segmentation by General Construction
• Market Segmentation by Tier Standards

Prominent Data Center Investors

• CyrusOne
• DataBank
• Digital Realty
• Equinix
• NTT DATA

Other Data Center Investors

• Aligned Data Centers
• American Tower (CoreSite)
• AUBix
• Centersquare
• CloudHQ
• Cologix
• Compass Datacenters
• COPT Data Center Solutions
• DartPoints
• DC BLOX
• Edge Centres
• EdgeConneX
• EdgePresence
• EdgeCore Digital Infrastructure
• Element Critical
• Flexential
• fifteenfortyseven Critical Systems Realty (1547)
• H5 Data Centers
• HostDime
• Iron Mountain
• Netrality Data Centers
• Novva Data Centers
• PowerHouse Data Centers
• Prime Data Centers
• QTS Realty Trust
• Sabey Data Centers
• Skybox Datacenters
• Stream Data Centers
• STACK Infrastructure
• Switch
• T5 Data Centers
• TierPoint
• Vantage Data Centers
• Vapor IO
• Yondr
• 365 Data Centers

New Entrants

• Corscale Data Centers
• Crane Data Centers
• Edged Energy
• NE Edge
• Quantum Loophole
• Rowan Digital Infrastructure
• Tract

For more information about this report visit https://www.researchandmarkets.com/r/m9nok7

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