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.
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The North American Colocation and Managed Hosting (CMH) Services Market is expanding rapidly due to increasing demand for hyperscale data centers, cloud storage, and advanced cybersecurity solutions. Businesses across sectors are prioritizing efficient data management supported by technologies like endpoint security, network monitoring, and connected IoT devices. The integration of artificial intelligence is optimizing operational workflows, especially in hybrid cloud environments that blend flexibility and control. With the rising adoption of managed hosting, companies are ensuring reliable data backup and seamless disaster recovery processes. High-performance colocation facilities now offer scalable services including server leasing, enhanced network security, and robust data encryption. Protection mechanisms like firewalls and DDoS protection are essential for maintaining the integrity of virtual servers, whether deployed in a private cloud or public cloud configuration.
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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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.
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.
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.
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.
Detailed analysis of the CMH market in North America highlights the growing need for streamlined data migration and scalable infrastructure to support evolving digital demands, especially amid the continued rise of remote work. Ensuring business continuity and meeting regulatory compliance requirements—such as GDPR compliance, HIPAA compliance, and PCI DSS—remain top priorities for enterprises across industries. Enhanced IT infrastructure and optimized storage solutions are being developed to support increased bandwidth allocation, effective power management, and advanced cooling systems. The use of data analytics, automation tools, and virtual machines in cloud computing environments is accelerating. Demand for multi-tenant hosting and edge computing is also on the rise, helping to achieve lower latency through load balancing and improved data sovereignty. These innovations support high availability and latency reduction, making CMH services integral to modern digital strategies.
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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