Over $500 billion for colocation in data centers by 2034

A DATACENTERS.com study forecasts that the global server colocation market will reach around $569.58 billion by 2034, with an average annual growth rate of ~13.2%.
The numbers indicate that more and more organizations will be building their IT strategy around data centers that provide the technological infrastructure for business development.  

Key growth drivers in the industry

Server colocation means placing physical equipment in a specialized data center that provides the proper environment for its operation. There are several main factors why such a service is increasingly preferred by businesses:

• Need for AI infrastructure: Training and managing large language models requires high power, low latency, and an energy-efficient alternative to cloud solutions with enough capacity. Such infrastructure can be maintained and serviced in a high-class professional data center. 
• Cloud cost optimization: Many businesses associate cloud services with insufficient cost predictability. Colocation can provide them with an optimized environment and optimal cost returns. 
• Sovereignty and regulations: Numerous regulations require businesses to physically store customer data within national borders and have full control over access to it. Data center colocation guarantees exactly this physical space, subject to monitoring, audit, and control. 
• Multi-cloud and edge architecture: Many large organizations distribute their load among different cloud service and connectivity providers. The data center can serve as a neutral connection point between all of them.
• ESG and energy efficiency: Green policies are at the core of the values of almost every modern organization. The role of data centers here is key—they provide modern cooling systems, renewable energy sources, and optimal resource consumption, enabling businesses to achieve high levels of energy efficiency without even investing in their own IT infrastructure. 

Which sectors are driving the growth?

For almost every business, server colocation in a data center brings numerous advantages. However, in several industries, demand is growing at a tremendous rate:

• Artificial intelligence (AI): Startups, labs, and enterprises focusing on AI technologies and the need for physical presence close to their users
• Financial services: On one hand, companies in the financial sector depend on the physical location of their headquarters, exchanges, etc., to ensure low latency. On the other hand, they must also comply with all regulations regarding their users' data, often tied to its physical location. 
• Media and gaming: These industries use huge computational power to deliver high-quality content and need sufficient and guaranteed resources, connectivity, and continuity to enable real-time processing and broadcasting.  
• Healthcare: Here, the top priority is the highest level of data protection and its physical location within specific geographic borders, some of the main advantages of colocation in a data center. 
• Telecoms: They use ever-greater computing resources, which must be available close to network and communication points.  

It is important to note that not only small businesses in these and other industries use colocation. On the contrary, the largest providers and AI players also reserve infrastructure in data centers. The reason is pragmatic: demand for computing resources and build times surpass their own capacities, and colocation offers a quick and efficient way to scale the business.

AbsCloud Data Center available for businesses in Varna and the region

Since spring 2025, businesses in Varna and Eastern Bulgaria have access to modern infrastructure at AC☁DC without the need for huge investments in data centers. We offer solutions for both small and large companies looking for a stable data center service and wanting to take advantage of server colocation.

In AC☁DC you can count on fast access, low latency, the possibility of direct connections and cross-connects, in an environment suitable for your servers’ operation. We also offer a number of extras that help maintain and service your equipment onsite. 

Contact our team and ask for an individual server colocation offer tailored to your business needs.

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