Colocation Edge Data Center Market Size & Share 2022 to 2028
Market Size by Type (Retail Colocation, Wholesale Colocation), by End Use (SME, Large Enterprises), by Application (BFSI, Energy, Government & Defense, Healthcare, IT & Telecom, Manufacturing, Retail) & Forecast.
Report ID: GMI5200
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Published Date: February 2022
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Report Format: PDF
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Authors:
Preeti Wadhwani, Aishvarya Ambekar
Colocation Edge Data Center Market Size
Colocation Edge Data Center Market Size exceeded USD 5 billion in 2021 and is projected to grow at over 20% CAGR from 2022 to 2028. Advancements, such as cloud computing, IoT, Big Data, Machine Learning (ML), and Artificial Intelligence (AI), will foster the market growth during the forecast timeline.
Companies, such as Microsoft Corporation, IBM Corporation, and The Hewlett Packard Enterprise Company, are investing in R&D to develop their existing product range sets. For instance, in April 2021, IBM Corporation introduced updates to its Elastic Storage System (ESS). The new version of ESS3200 provides double-read performance capabilities, and the ESS 5000 offers an additional 10% storage capacity as compared to its predecessor. It supports end users in easy deployment & scalability options, enabling them to shift their data onto colocation sites. Owing to the availability of solutions with seamless data migration processes, more customers will be encouraged to use cloud-based technology.
COVID-19 Impact
The COVID-19 pandemic has positively impacted the colocation edge data center market expansion as it assisting organizations in meeting the high-capacity requirement of ever-increasing internet traffic. Several government organizations imposed stringent lockdown protocols and travel restriction norms during the pandemic to reduce the overall virus spread. This factor has driven data generation & traffic from several sectors due to Work from Home (WFH) policies.
Companies are integrating digital solutions with their systems for improving operational efficiency, tackling labor shortage issues, and reducing the overall cost. The pandemic has increased an individual’s reliance on online services for shopping, entertainment, and payment purposes, driving total users and encouraging companies to enhance their back-end networks. The demand for advanced IT infrastructure will support the global need for colocation edge data center facilities during the forecast timeframe.
Colocation Edge Data Center Market Analysis
Germany colocation edge data center market is expected to witness 20% growth rate through 2028 led by the rising number of data centers. To strengthen their market positionings, colocation providers are increasing their presence in different locations in the country. For instance, in October 2021, Equinix Inc. opened its FR8 International Business Exchange data center in the country. The company invested around USD 103 million for approximately 4,800 m² in colocation space. It will deliver network edge solutions and operate on 100% renewable energy. This factor will support them in catering to a large set of customers in the market, increasing service availability for various end users, increasing market competition in the sector, and improving the affordability & quality of services in the region.
In U.S., colocation edge data center market is estimated to attain a CAGR of 20% till 2028 impelled by the expanding healthcare sector. Market players through investments in infrastructural expansion are catering to the changes in the pharmaceutical sector. In May 2021, AMPAC Fine Chemicals invested around USD 25 million in its current location in Virginia, U.S. This investment will enable AMPAC Fine Chemicals to build an analytical division and improve its R&D department abilities with regard to pharma ingredients. For this project, the company will collaborate with Civica, Phlow and Virginia’s Commonwealth University’s Medicines to manufacture necessary medicines for the U.S. healthcare providers. The initiatives from the companies for extensive testing services & developments for the validation, analysis, and release of APIs & intermediates will boost the requirement of high-speed servers and computing software, thereby fueling the industry growth.
The adoption of advanced technologies, such as cloud computing and data analytics, has propelled the demand for data center colocation services over the past few years. Market players are using edge solutions to improve data handling and customer services. For instance, in October 2021, ABN AMRO signed an agreement with IBM Corporation & Kyndryl for managing its hybrid cloud infrastructure. Through this pact, they are focusing on supporting their international & domestic operations. The deal will include the deployment of single services delivery models, SaaS, and Azure & on-premises private cloud services. The rising integration of cloud-based solutions in the BFSI sector will augment the demand for colocation edge data centers that ensure fast & real-time data transfers.
Asia Pacific colocation edge data center market captured 30% of revenue share in 2021. The governing authorities in the region are promoting & focusing on implementing advanced technologies in existing systems to influence efficiency and sustainability. In June 2021, the Singapore National Research Agency established a new lab with a local manufacturing software firm to support manufacturers to develop Industry 4.0 capabilities. It will help market participants in merging industrial IoT and AI to optimize their production processes and build a robust supply chain.
Colocation Edge Data Center Market Share
Key companies operating in the colocation edge data center market include
Market leaders are focusing on establishing new data centers to increase their penetration across multiple regions.
The colocation edge data center market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2018 to 2028 for the following segments:
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Market, By Type
Market, By End-use
Market, By Application
The above information has been provided for the following regions and countries:
Research methodology, data sources & validation process
This report draws on a structured research process built around direct industry conversations, proprietary modelling, and rigorous cross-validation and not just desk research.
Our 6-step research process
1. Research design & analyst oversight
At GMI, our research methodology is built on a foundation of human expertise, rigorous validation, and complete transparency. Every insight, trend analysis, and forecast in our reports is developed by experienced analysts who understand the nuances of your market.
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2. Primary research
Primary research forms the backbone of our methodology, contributing nearly 80% to overall insights. It involves direct engagement with industry participants to ensure accuracy and depth in analysis. Our structured interview program covers regional and global markets, with inputs from C-suite executives, directors, and subject matter experts. These interactions provide strategic, operational, and technical perspectives, enabling well-rounded insights and reliable market forecasts.
3. Data mining & market analysis
Data mining is a key part of our research process, contributing nearly 20% to the overall methodology. It involves analysing market structure, identifying industry trends, and assessing macroeconomic factors through revenue share analysis of major players. Relevant data is collected from both paid and unpaid sources to build a reliable database. This information is then integrated to support primary research and market sizing, with validation from key stakeholders such as distributors, manufacturers, and associations.
4. Market sizing
Our market sizing is built on a bottom-up approach, starting with company revenue data gathered directly through primary interviews, alongside production volume figures from manufacturers and installation or deployment statistics. These inputs are then pieced together across regional markets to arrive at a global estimate that stays grounded in actual industry activity.
5. Forecast model & key assumptions
Every forecast includes explicit documentation of:
✓ Key growth drivers and their assumed impact
✓ Restraining factors and mitigation scenarios
✓ Regulatory assumptions and policy change risk
✓ Technology adoption curve parameter
✓ Macroeconomic assumptions (GDP growth, inflation, currency)
✓ Competitive dynamics and market entry/exit expectations
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Our triple-layer validation process ensures maximum data reliability:
✓ Statistical Validation
✓ Expert Validation
✓ Market Reality Check
Trust & credibility
Verified data sources
Trade publications
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Industry databases
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Regulatory filings
Government procurement records and policy documents
Academic research
University studies and specialist institution reports
Company reports
Annual reports, investor presentations, and filings
Expert interviews
C-suite, procurement leads, and technical specialists
GMI archive
13,000+ published studies across 30+ industry verticals
Trade data
Import/export volumes, HS codes, and customs records
Parameters studied & evaluated
Every data point in this report is validated through primary interviews, true bottom-up modelling, and rigorous cross-checks. Read about our research process →