Colocation Data Centers
Colocation operators leasing data center space, power, and cooling to enterprise and wholesale customers.
- 4
- Verticals
Overview
Colocation Data Centers covers facilities that lease space, power, and cooling to multiple tenants who deploy their own equipment — the multi-tenant infrastructure model led by colocation majors (Equinix, Digital Realty) and a base of regional providers. It serves enterprises, cloud on-ramps, and network interconnection.
Demand is driven by enterprise outsourcing, hybrid-cloud and interconnection needs, and proximity to cloud and network ecosystems, with interconnection-rich facilities commanding premium value. It is consolidating around scaled REITs and operators, capital-intensive, and a core, recurring-revenue layer of digital infrastructure.
Market snapshot
Colocation sits within data-processing and hosting (NAICS 518210) and is not separately disclosed by the Census Bureau, so the segment is not separately sized here; public leaders include Equinix and Digital Realty.
Business model & economics
Revenue model
Recurring space, power, and interconnection leases
Key economics
- Recurring revenue
- High
- EBITDA margin
- Strong
- Capex intensity
- High
recurring multi-tenant leases
REIT-like recurring economics
Characteristics
- Multi-tenant model led by Equinix and Digital Realty.
- Interconnection-rich facilities command premium value.
- Enterprise outsourcing and hybrid cloud drive demand.
M&A deal context
Who’s acquiring
- Colocation REITs & operators
- Infrastructure funds & PE
- Regional-provider consolidators
What’s driving deals
- Consolidation around scaled REITs and operators.
- Interconnection and hybrid-cloud demand.
- Infrastructure-capital roll-up of regionals.
Verticals in this segment
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