North America Data Center Market Surges with Growing Colocation and Tier 3 Investments

 Hyderabad, July 29, 2025 — North America data center market continues its upward momentum, driven by increased cloud adoption, hyperscale deployments, and rising demand for colocation and energy-efficient infrastructure.

The North America Data Center Market size is estimated at 22.1 thousand MW in 2025, and is expected to reach 28.6 thousand MW by 2030, growing at a CAGR of 5.29%.
Further, the North America data center market is expected to generate colocation revenue of USD 25,932.6 Million in 2025 and is projected to reach USD 42,227.7 Million by 2030, growing at a CAGR of 10.24% during the forecast period (2025–2030).

Strong Cloud and Hyperscale Demand Fueling Expansion

The north america data center market is witnessing consistent growth, driven by the region’s increased reliance on cloud computing and expanding hyperscale infrastructure. Tech giants and cloud service providers are rapidly expanding their data center footprints, particularly in the United States, where the demand for secure, scalable, and sustainable infrastructure is outpacing existing capacity. Public cloud adoption among enterprises and government bodies continues to be a strong catalyst for new development, as companies require low-latency access to cloud resources.

Tier 3 and Tier 4 facilities are seeing higher demand due to their enhanced security, redundancy, and reliability. Organizations are prioritizing high-availability environments that support their digital transformation initiatives. Moreover, companies operating across North America are increasingly opting for colocation services to avoid the capital expenditure and complexities involved in managing their own data center operations.

North America Colocation Market Trends Driving Infrastructure Investment

As businesses seek to optimize operations and reduce infrastructure overhead, the north america colocation market trends highlight a shift toward hybrid IT environments. Colocation is increasingly being used to bridge public and private cloud deployments, allowing organizations to scale dynamically while maintaining control over critical assets. The rise in edge data center deployments across urban and rural areas also reflects a push to support latency-sensitive applications like streaming, gaming, and smart city solutions.

Large and mega data centers are leading the market in terms of capacity additions, with increased investment focused on green building certifications and energy-efficient cooling technologies. The ongoing emphasis on sustainability, especially in Tier 3 and Tier 4 sites, is pushing operators to explore renewable energy sources and liquid cooling techniques to reduce environmental impact and energy costs.

Check out more details and stay updated with the latest industry trends, including the Japanese version for localized insights: https://www.mordorintelligence.com/ja/industry-reports/north-america-colocation-market-industry?utm_source=blogger

Segment-Level Insights: Size, Tier, and Utilization

The north america data center market is segmented by data center size, tier type, absorption rate, and country. Among these, the large and mega-sized data centers are expected to dominate capacity expansion, driven by hyperscale companies building for long-term scalability. Medium and small-sized facilities remain important for local enterprises and edge deployments, particularly in Canada and Mexico.

From a tier standpoint, Tier 3 data centers dominate new builds due to their balance between cost and reliability. However, Tier 4 developments are gaining traction for mission-critical industries such as finance and healthcare, where downtime is not an option. On the other end, Tier 1 and Tier 2 sites continue to serve small to mid-sized businesses requiring limited redundancy.

Utilization is improving across the board, with a marked shift from non-utilized to utilized capacity. Operators are working to reduce underutilized space and increase rack density to support expanding workloads. As sustainability becomes a key performance indicator, the industry is focusing on energy usage effectiveness (EUE) and power usage effectiveness (PUE) improvements.

Regional Dynamics: U.S. Leading, Mexico and Canada Catching Up

The United States holds the dominant share in the north america data center market, accounting for the majority of new builds, capacity absorption, and investment. Primary hubs such as Northern Virginia, Dallas, Chicago, and Silicon Valley continue to attract hyperscale deployments due to their fiber connectivity, power availability, and proximity to business centers.

Canada and Mexico, meanwhile, are emerging as competitive alternatives due to lower energy costs and growing demand for regional data storage. In Canada, provinces like Quebec and Ontario are focusing on leveraging their abundant hydropower resources to promote sustainable data center development. In Mexico, foreign investments and regulatory support are contributing to an increase in colocation and edge facilities, particularly near the U.S. border and major metro areas like Mexico City.

Rest of North America, while a smaller segment, is expected to see modest growth as businesses look to decentralize operations and tap into less saturated markets.

Technology and Sustainability Shaping Future Growth

The integration of artificial intelligence, machine learning, and automation tools is helping operators optimize operations and reduce energy consumption. Advanced monitoring, predictive maintenance, and real-time analytics are being used to improve uptime and operational efficiency. Furthermore, sustainability is no longer optional, as data center operators respond to pressure from customers, regulators, and investors to adopt cleaner, greener practices.

Across the region, renewable energy sourcing, carbon offset programs, and innovations in cooling technology are becoming standard components of new developments. Liquid cooling, direct-to-chip methods, and modular design approaches are being widely tested and adopted to meet evolving efficiency benchmarks.

For a complete market analysis, visit the Mordor Intelligence page: https://www.mordorintelligence.com/industry-reports/north-america-colocation-market-industry?utm_source=blogger

Competitive Landscape and Key Players

The north america data center market is highly competitive, with global and regional players actively investing in new facilities, partnerships, and acquisitions. Companies are focusing on scalability, energy efficiency, and customer-specific solutions to maintain their market presence. Some of the key players operating in the region include:

  • Equinix Inc.
  • Digital Realty Trust Inc.
  • CyrusOne Inc.
  • QTS Realty Trust Inc.
  • Switch Inc.
  • Cologix
  • Vantage Data Centers
  • EdgeConnex
  • CoreSite Realty Corporation
  • Compass Datacenters

These companies continue to shape the competitive landscape through aggressive expansion strategies, infrastructure upgrades, and innovations in service delivery models.

Conclusion

The north america data center market is in a period of sustained expansion, driven by digital transformation, increasing data consumption, and the rising demand for reliable, scalable, and energy-efficient infrastructure. As colocation and hyperscale requirements evolve, the region is poised to remain at the forefront of global data center innovation. Investments in Tier 3 and Tier 4 facilities, coupled with advancements in sustainability and automation, will continue to redefine the region’s data center ecosystem over the next five years.

Location: United States

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