U.S. Data Center Colocation Market - Industry Outlook & Forecast 2023-2028

U.S. Data Center Colocation Market - Industry Outlook & Forecast 2023-2028
The U.S. data center colocation market is estimated to grow with a CAGR of 6.70% from 2022 to 2028.

KEY HIGHLIGHTSThe rise in coverage of 5G and its deployment in the region will attract more edge data center investment across the country. The deployment of submarine cables such as SEALink, Bifrost, and others, which are expected to be live in coming years, will help the country establish a better connection with the rest of the world.The U.S. government initiated several schemes and incentives to attract data center investments. Arizona plans to extend its data center tax breaks by ten years up to 2033. A data center operator must invest a minimum of USD 25 million in a location with a population of 800,000 or less to be eligible for the tax breaks. Alternatively, the operator must invest a minimum of USD 50 million in a location with a population of over 800,000.Across the U.S. data center colocation market, all colocation companies seek to use renewable energy as their priority power source. For instance, in April 2022, CyrusOne collaborated with Gexa Energy, a NextEra Energy subsidiary, to procure solar (30 MW) and wind (10 MW) energy for its North Texas data centers.SEGMENTATION ANALYSIS

Segmentation by Colocation Service TypeRetail ColocationWholesale ColocationSegmentation by InfrastructureElectrical InfrastructureMechanical InfrastructureGeneral ConstructionSegmentation by Electrical InfrastructureUPS SystemsGeneratorsTransfer Switches & SwitchgearPower Distribution UnitsOther Electrical InfrastructureSegmentation by Mechanical InfrastructureCooling SystemsRacksOther Mechanical InfrastructureSegmentation by Cooling SystemsCRAC & CRAH UnitsChiller UnitsCooling Towers, Condensers & Dry CoolersEconomizers & Evaporative CoolersOther Cooling UnitsSegmentation by Cooling TechniqueAir-based Cooling TechniqueLiquid-based Cooling TechniqueSegmentation by General ConstructionCore & Shell DevelopmentInstallation & Commissioning ServicesEngineering & Building DesignFire Detection & SuppressionPhysical SecurityDCIM/BMS SolutionsSegmentation by Tier StandardsTier I & Tier IITier IIITier IVMARKET TRENDS & OPPORTUNITIES

Edge Data Center Investments in Upcoming 6G Era Boosted by Next-generation Connectivity

The U.S. is one of the fastest-growing countries regarding 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 IIoT into different industries and making it more accessible for businesses to utilize its benefits.

Sustainability Initiatives by Colocation Operators

Colocation companies nationwide focus on using renewable energy as their main power source. Operators plan to reduce harm to the environment by using clean energy solutions. This change is part of a larger trend in the market to adopt renewable sources, such as solar and wind power, to run data centers and other infrastructure.

Colocation Demand Revolutionized by AI & VR

Artificial intelligence (AI) and virtual reality (VR) drive the demand for colocation services in the U.S. data center colocation market. 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.

REGIONAL ANALYSISOperators are keenly interested in the Southeastern, especially in Virginia. They make substantial investments to expand their presence and market share in the area.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 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 edge data center market is projected to experience substantial growth in New York, New Jersey, Pennsylvania, and Connecticut, greatly improving connectivity in the northeastern US.The data center space will likely increase in three key locations: Phoenix, Arizona, and Northern Virginia. These regions are major data center locations, attracting substantial investments and attention from colocation providers.Segmentation by RegionSoutheastern USMidwestern USSouthwestern USWestern USNortheastern USVENDOR LANDSCAPECyrusOne, DataBank, Digital Realty, Equinix, NTT Global Data Centers, Aligned, American Tower, CloudHQ, Cologix, Compass Datacenters, COPT Data Center Solutions, CoreSite, Cyxtera Technologies, DartPoints, DC BLOX, EdgeConneX, Prime Data Centers, and others are prominent operators in the U.S. data center colocation market.Both wholesale and retail colocation vendors are expected to thrive due to increased demand in the U.S. data center colocation market. Various sectors, including BFSI, IT/telecom, and cloud, drive the demand for colocation services.Prominent Data Center InvestorsCyrusOneDataBankDigital RealtyEquinixNTT Global Data CentersOther Data Center InvestorsAlignedAmerican TowerCloudHQCologixCompass DatacentersCOPT Data Center SolutionsCoreSiteCyxtera TechnologiesDartPointsDC BLOXEdgeCore Internet Real EstateEdgeConneXEdgePresenceElement CriticalEvoqueFlexentialfifteenfortyseven Critical Systems Realty (1547)GIGA Data CentersH5 Data CentersHostDimeIron MountainNetrality Data CentersNovva Data CentersPrime Data CentersQTS Realty TrustSabey Data CentersSkybox DatacentersStream Data CentersSTACK InfrastructureSwitchT5 Data CentersTierPointVantage Data CentersVapor IONew EntrantsAUBixCorscale Data CentersEdge CentresiMCriticalPowerHouse Data CentersQuantum LoopholeYondrKEY QUESTIONS ANSWERED:

1. How big is the U.S. data center colocation market?

2. What is the growth rate of the U.S. data center colocation market?

3. What is the estimated market size in terms of area in the U.S. data center colocation market by 2028?

4. What are the key trends in the U.S. data center colocation market?

5. How many MW of power capacity is expected to reach the U.S. data center colocation market by 2028?