The North America colocation and managed hosting services market is projected to grow by USD 88.66 billion at a CAGR of 14.09% between 2023 and 2028, according to the latest forecast. This growth is driven by surging demand for cloud-based storage systems, data center consolidation, and real-time connectivity enabled by IoT and edge computing.As businesses across sectors modernize their IT infrastructure, colocation and managed hosting services are proving essential for reducing latency, enhancing security, and enabling scalability. From secure data environments to fully managed server infrastructure, these services are transforming how organizations store, process, and secure their data.For more details about the industry, get the PDF sample report for free
As demand accelerates, industry giants and regional specialists are expanding their capabilities and presence across North America.
Equinix Inc. – Pioneers of interconnected data centers with cloud on-ramps and edge capabilities
Digital Realty Trust Inc. – Offers scalable, sustainable colocation solutions across hyper-scale campuses
IBM Corporation – Combines managed hosting with AI-enhanced data security and monitoring
CyrusOne LLC – Known for high-density, energy-efficient colocation centers
Iron Mountain Inc. – Specializes in secure data storage for heavily regulated industries
Other notable names include AT&T Inc., Rackspace Technology, Colt Technology Services, Fidelity National Information Services, and Lumen Technologies, all contributing to a diverse and competitive landscape.
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Segmentation – Who’s Driving Demand and Where
The market is segmented by end-users, type, and geography. Understanding these segments provides insights into evolving customer needs.
The BFSI (Banking, Financial Services & Insurance) sector is projected to see substantial growth due to rising demands for security, compliance, and real-time access. Valued at USD 12.43 billion in 2018, this segment continues to rise with the proliferation of mobile and online banking.
Other sectors fueling the demand:
IT & Telecom – Growing reliance on low-latency infrastructure for data-heavy applications
Government & Public Sector – Secure data facilities for national and civic operations
Manufacturing
Others
Wholesale colocation: Ideal for enterprises with large-scale needs, offering cost-effective high-density environments.
Retail colocation: Preferred by smaller businesses for flexibility, affordability, and managed service options.
Within North America, the United States accounts for the largest share, driven by its advanced cloud infrastructure and data center ecosystems. Canada and Mexico are showing strong growth potential as cross-border digital commerce and regulatory data compliance increase.
Trends and Drivers Shaping the CMH Market
As enterprises migrate to hybrid or multi-cloud strategies, colocation centers serve as physical anchors for cloud workloads. The combination of cloud platforms and colocation offers:
Greater data sovereignty and compliance
Proximity to cloud access points
Enhanced business continuity and disaster recovery
With virtualization and cloud computing, many organizations are reducing their data center footprint. Instead of managing scattered IT sites, they’re centralizing workloads into fewer, energy-efficient colocation centers, which reduces operational costs and carbon footprint.
The rise of edge computing is pushing businesses toward colocation sites that offer:
Lower latency for real-time analytics
Proximity to end users and devices
Support for AI-powered processing close to the data source
These demands make distributed edge sites and hyperscale colocation increasingly attractive, especially for industries like healthcare, finance, and autonomous vehicles.
Regional Insights – Colocation Growth by Country
The U.S. continues to lead with high data center density, global tech presence, and stringent compliance needs (HIPAA, SOC 2, etc.). Major cities like Dallas, Ashburn, and Silicon Valley are home to hyperscale facilities.
Canadian businesses are adopting colocation for data sovereignty and green initiatives. Cooler climates reduce energy usage for cooling, boosting sustainability.
Driven by nearshoring trends and a growing tech startup ecosystem, Mexico is seeing increased investment in managed hosting solutions for retail, telecom, and government sectors.
Challenges of the CMH Market
Cost escalation due to demand for customizable, flexible solutions
Data privacy and security risks require stronger compliance protocols
Skill gaps in managing hybrid infrastructure and vendor relationships
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The colocation and managed hosting services market in North America is no longer a niche IT solution—it's a strategic asset. With technologies like AI, IoT, and 5G driving demand for ultra-reliable, low-latency infrastructure, colocation providers are emerging as critical partners in digital transformation.
Enterprises seeking to:
Expand into new geographies
Meet compliance mandates
Optimize TCO and uptime
Leverage hybrid cloud architecture
should evaluate data center partners based on energy efficiency, interconnectivity, and customization options.
The North America Colocation and Managed Hosting (CMH) Services Market is experiencing robust growth, fueled by increasing reliance on secure and scalable data center infrastructure. Enterprises are rapidly adopting colocation services and managed hosting solutions to streamline operations and mitigate capital expenditure. The market is expanding alongside rising demand for cloud storage, especially within the BFSI sector, which requires robust IT infrastructure and resilient network security. As businesses undergo digital transformation, key industries such as IT telecom, manufacturing sector, and energy utilities are leveraging CMH services for improved uptime reliability and data integrity. The shift to remote work and hybrid work models further drives adoption, with companies prioritizing connectivity solutions, enhanced customer experience, and optimized client relationships. In this evolving landscape, cybersecurity solutions and protection against cyber threats like malware protection are critical, especially for data-sensitive operations.
Prioritize Providers Offering Hybrid Cloud Integration
Choose those with cloud on-ramps and support for AWS, Azure, and Google Cloud.
Demand Transparent SLAs
SLAs must clearly outline uptime, maintenance windows, and escalation processes.
Leverage Green Data Centers
Opt for facilities with adaptive control systems, cold aisle containment, and energy-efficient lighting.
Evaluate TCO, Not Just CapEx
Factor in long-term energy savings, staffing reduction, and improved uptime.
The North America colocation and managed hosting services market is entering a phase of smart expansion, where security, scalability, and sustainability are non-negotiable.
BFSI and IT segments will continue driving demand, while edge computing and AI reshape infrastructure needs.
U.S. dominance in hyperscale deployments ensures robust regional momentum.
Pricing dynamics and cyber risk management will differentiate market leaders from laggards.
The research analysis reveals that the market is being shaped by emerging technologies and compliance-driven strategies. The rise of artificial intelligence, IoT devices, and automation tools within data-driven ecosystems is boosting demand for sophisticated data processing and endpoint security. Stringent requirements such as HIPAA compliance and GDPR compliance are influencing service adoption across sectors like healthcare and finance, which handle large volumes of healthcare data and financial data. Businesses are increasingly turning to retail colocation, wholesale colocation, and server rental services to manage workloads and optimize operational efficiency. The growth of e-commerce platforms and media entertainment platforms further contributes to heightened requirements for network monitoring and data management. As part of the broader smart revolution, companies seek infrastructure outsourcing and cloud computing to ensure flexible scalability. Overall, the CMH market in North America is propelled by its focus on regulatory compliance, data security, and reliable support for diverse, mission-critical applications.
By 2028, colocation will not just be a support function but a strategic enabler of digital transformation. As real-time analytics, AI, and IoT become pervasive, businesses will rely on colocated edge nodes to process data with near-zero latency.
Expect increased mergers, greenfield data center builds, and tighter regulatory oversight—especially in sectors like healthcare and finance.
In a world where data is currency, businesses can't afford downtime, inefficiency, or risk. The North America colocation and managed hosting services market is meeting this challenge head-on—providing the secure, scalable, and sustainable infrastructure modern organizations need.
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