Data Center Colocation Trends for 2023

 In Branding, Business, Frontpage

Colocation refers to the practice of renting space in a third-party data center facility to house IT infrastructure and equipment. This can include servers, storage devices, and networking equipment. Colocation providers offer a secure and reliable environment for organizations to store and manage their critical IT assets. 

In the current tech market, colocation is a popular option for organizations that want to outsource their own data center operations to a specialized provider, rather than investing in building and maintaining their facility. Colocation providers offer a range of services, including power and cooling management, security, connectivity, and support, enabling organizations to focus on their core business activities. 

Many colocation providers also offer additional value-added services, such as cloud connectivity, disaster recovery, and managed services, which help organizations optimize their IT operations and reduce costs. With the increasing demand for data center services, the colocation market is expected to continue to grow in the coming years. 

While cloud storage has become increasingly popular over the years, some businesses may choose to pull back from all-cloud storage and opt for a hybrid solution that includes colocation. Colocation services can serve the needs of these businesses in several ways.  It provides greater control over data and infrastructure, giving businesses more flexibility and control over their IT operations, applications, and workflows.  It also offers a high level of security and reliability with direct access to its servers and equipment. Colocation can be cost-effective with shared facilities and resources, economies of scale, and reduction of overall expenses.  It also allows a business to grow and adapt, with plans that can accommodate changing needs.  

Like any service industry, as time goes on, the industry grows and evolves. 

So, what is hot in 2023 for the colocation industry?   

Hybrid Cloud Adoption:

With the increasing need for cloud-based applications, more companies are likely to adopt a hybrid cloud approach, where they use a combination of private and public cloud services. This would require data center colocation providers to offer hybrid cloud solutions to meet the needs of their clients. 

Edge Computing:

Edge computing involves processing data closer to the source of its generation, reducing latency, and improving application performance. This trend is expected to continue, leading to the deployment of more edge data centers, which can be collocated in existing facilities. 


With the growing concern about the impact of data centers on the environment, there is likely to be a greater focus on sustainability in 2023. Data center colocation providers may look to use renewable energy sources and implement energy-efficient designs to reduce their carbon footprint. 


Cybersecurity threats continue to evolve, making it critical for data centers to have strong security measures in place. Data center colocation providers may invest in advanced security technologies and practices to ensure the protection of their clients’ data. 

AI and Automation:

Artificial intelligence and automation are increasingly being used to optimize data center operations, reduce costs, and improve efficiency. Data center colocation providers may leverage these technologies to enhance their services and provide more value to their clients. 

Industry Favorites: 

Historically, companies in the technology, finance, and healthcare industries have been some of the biggest users of colocation services. These industries require high-performance computing power, reliable uptime, and secure data storage, which can be provided by colocation facilities. As technology continues to play an increasingly important role in businesses across various sectors, more industries may turn to colocation to meet their growing IT infrastructure needs, but the current industry users will likely continue to dominate the market.  

Geographical Expansion:

As the popularity of colocation continues to grow, more businesses will seek this reliable and secure hosting solution for their critical IT infrastructure.  The growth of colocation has had geographically strong regions of adoption rates.  North America has traditionally been a major market for colocation services and continues to be a leader in this space. According to a report by MarketsandMarkets, the North American data center colocation market is expected to reach $31.5 billion by 2023, with the US being the largest contributor to this growth.  

Europe is another significant market for colocation services, with countries such as the UK, Germany, and the Netherlands seeing strong demand. According to a report by Technavio, the European data center colocation market is expected to grow by $12.06 billion during 2021-2025, with the UK being one of the largest markets.  

Asia-Pacific is also emerging as a key region for colocation services, with China, Japan, and Singapore leading the way. According to a report by Technavio, the Asia-Pacific data center colocation market is expected to grow by $13.77 billion during 2021-2025, with China being one of the largest markets. Look for these markets to continue to grow and look for Asia-Pacific to tip the scales in their geographic direction as the front runner.  

It’s important to note that these are just some potential trends and developments that may shape the data center colocation landscape in 2023.

The actual trends and developments that emerge may vary based on a variety of factors, including technological advancements, economic conditions, and industry-specific events. 

For businesses who are looking for alternatives to all-cloud storage, colocation can serve their needs by providing more control over their data and IT infrastructure, high levels of security and reliability, cost-effective solutions, and scalability. By leveraging colocation services, businesses can optimize their IT operations and achieve their business objectives. 

If you are considering colocation or wish to expand your current colocation service, Molnii is offering a colocation deal!  You can get $95 per U of space in their Tier 3+ data center right now.  Reach out to Molnii for more information on how we can support your colocation needs at a great price! 

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