As per MRFR analysis, the Canada data center colocation market size was estimated at 3.65 (USD billion) in 2023.The Canada data center colocation market industry is expected to grow from 4.5(USD billion) in 2024 to 18 (USD billion) by 2035. The Canada data center colocation market CAGR (growth rate) is expected to be around 13.431% during the forecast period (2025-2035).
Key Canada Data Center Colocation Market Trends Highlighted
The Canada data center colocation market is witnessing significant trends as businesses increasingly seek scalable and efficient IT infrastructure solutions. One key market driver is the rapid digital transformation across various sectors in Canada, fueled by the rise of cloud computing, artificial intelligence, and big data analytics. As organizations look to enhance their operational efficiencies, they are turning to colocation services as a viable alternative to managing on-premises data centers, allowing them to focus on their core business while leveraging external expertise.
Numerous opportunities exist to be examined, especially regarding regulatory compliance. Canada enforces strict data sovereignty regulations that require businesses to manage and store data domestically. This fosters a setting in which local colocation providers can excel, enabling them to deliver customized solutions that align with regulatory standards while maintaining data security and reliability. Moreover, the drive towards sustainable practices is shaping the market dynamics, with companies placing greater emphasis on green data center initiatives, thereby appealing to customers who seek environmentally responsible choices.
Recently, there has been a significant trend toward hybrid IT solutions, as companies integrate their on-premises assets with colocation services to enhance flexibility and improve disaster recovery capabilities. The growing prevalence of edge computing is compelling colocation providers to enhance their infrastructures to satisfy the demand for low-latency services in urban areas. Furthermore, the progress in interconnectivity among data centers in Canada has created a competitive environment, resulting in enhanced service offerings and pricing advantages for clients.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Canada Data Center Colocation Market Drivers
Growing Adoption of Cloud Services
The increase in the adoption of cloud computing services in Canada is a significant driver for the Canada data center colocation market. According to the Canadian Internet Registration Authority, as of 2021, around 92% of Canadian businesses reported using cloud services to some extent, which has shown a 20% increase from the previous year. This growing reliance on cloud infrastructure indicates a higher demand for colocation services, as businesses seek secure, scalable locations to host their cloud applications.
Major organizations, such as Amazon Web Services and Microsoft Azure, are also establishing more data centers in Canada to cater to this rising demand, thus amplifying growth within the colocation market. Moreover, federal initiatives promoting digital transformation align with this trajectory, aiming to enhance Canada's competitiveness in the global digital economy, as outlined in the Government of Canada's Digital Charter.
Increasing Data Security Regulations
The evolving landscape of data security and privacy regulations in Canada is driving the demand for colocation services. With the implementation of policies like the Personal Information Protection and Electronic Documents Act (PIPEDA), companies are under increasing pressure to ensure that their data is stored securely and compliantly.
A report by the Office of the Privacy Commissioner of Canada revealed a significant increase in companies seeking secure data storage options, with 65% of businesses indicating that compliance with these regulations is a fundamental reason for using colocation services. Organizations like Equinix and Digital Realty are investing in compliant data centers in Canada, which in turn boosts confidence among businesses to adopt colocation as a reliable option for their IT infrastructure.
Rising Demand for Edge Computing
The surge in Internet of Things (IoT) devices and the subsequent need for edge computing solutions are contributing to the growth of the Canada data center colocation market. As of 2022, it was reported that Canada has seen a 35% increase in the number of IoT devices deployed, which directly necessitates faster data processing and reduced latency. To address this, many organizations prefer colocation services at edge data centers to ensure optimal performance.
Leading firms such as Bell Canada and Telus are advancing their networks and services to support this shift to edge computing, thereby fostering the demand for localized colocation solutions in urban centers across the country.
Data Center Colocation Market Type Insights
The Canada data center colocation market by type encompasses retail colocation and wholesale colocation. Retail colocation provides customizable space and services targeted primarily at small to medium enterprises, allowing organizations to operate data services without significant capital investment in infrastructure.
This segment is important as it offers flexibility and various service level agreements tailored to client needs, which has driven demand in a growing digital economy like Canada's. Furthermore, the increased push towards digital transformation across various sectors in Canada has encouraged many businesses to seek cost-effective solutions for data storage and management, thus enhancing the appeal of retail colocation.
Wholesale colocation caters to larger enterprises and cloud service providers, offering them comprehensive packages that often cover extensive physical space and resources. This segment holds significant importance because it enables scalability and provides companies with greater control over their infrastructure, aligning with the rapid data growth driven by cloud computing and IoT. The trend toward large-scale data center deployments in urban areas, coupled with the robust connectivity options and favorable regulatory environment in Canada, has positioned wholesale colocation as a key player in meeting the demands of large-scale operations.
Both segments play a crucial role in the expanding ecosystem of the Canada data center colocation market, highlighting a vibrant landscape shaped by technological innovations and changing client needs. The growing emphasis on energy efficiency and sustainability in Canadian data centers underscores the prevailing trends in the market, as these factors become essential to both retail and wholesale colocation services.
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Data Center Colocation Market Deployment Type Insights
By deployment type, the Canada data center colocation market showcases a notable division primarily between cloud and on-premises solutions. Cloud deployment has emerged as a significant choice among businesses in Canada, primarily due to its flexibility and scalability, enabling organizations to respond swiftly to changing market demands.
This approach supports various industries, including finance and healthcare, which benefit from enhanced data accessibility and reduced operational costs. On-premises deployment holds a substantial share in specific sectors where data security and compliance are paramount, making it an essential option for enterprises that prioritize control over their IT infrastructure.
With the anticipated steady rise in Canada's internet traffic, fueled by the growth of digital services and remote work trends, the importance of both deployment types is expected to increase, catering to the distinct needs of various organizations. This duality creates a competitive environment where companies can select the deployment type that best fits their operational objectives while taking advantage of the benefits each option offers.
Data Center Colocation Market End User Insights
The Canada data center colocation market, by end user, includes domains such as BFSI, IT and telecom, Government and Defense, and Healthcare. The BFSI sector is particularly significant due to the increasing demand for secure and reliable data management solutions, leading to heightened investments in colocation services to ensure regulatory compliance.
The IT and telecom sectors contribute meaningfully to this market as the need for robust infrastructure to support cloud computing and various technological advancements surges. Government and defense agencies require secure and resilient data management systems, which enhances the importance of specialized colocation services catering to sensitive data handling. The healthcare sector is focusing on modernizing its IT infrastructure, driven by a rise in telemedicine and the need for efficient data storage solutions.
Canada Data Center Colocation Market Key Players and Competitive Insights
The Canada data center colocation market has witnessed significant growth in recent years as businesses increasingly seek reliable and scalable infrastructure solutions. This market is characterized by the presence of various players offering distinct services tailored to meet the needs of local and international businesses.
Competition is fierce, driven by the demand for enhanced data security, efficient operations, and the ability to support cloud computing and big data initiatives. As companies strive to establish a strong foothold, they are investing in advanced technologies and expanding their geographic reach. The rise of digital transformation across various sectors has further fueled the growth of colocation services, making the competitive landscape dynamic and continuously evolving.
Aptum Technologies consistently provides significant value in the colocation sector by upholding a carrier-neutral, secure, and globally interconnected infrastructure, despite the divestment of its Canadian colocation assets in 2021. Currently, its colocation services—offered across 14 data centres in North America and Europe—focus on flexibility and hybrid integration, providing a range of solutions from wholesale cages and retail cabinets to managed rack-unit options.
These facilities are equipped with ISO 27001, SOC2 Type II, and PCI DSS certifications, complemented by redundant power, cooling, and round-the-clock Smart Hands support, guaranteeing high availability and operational resilience. Aptum’s colocation is strategically integrated with its hybrid cloud and managed infrastructure, facilitating seamless connectivity, unified monitoring, and strong compliance—empowering organizations to optimize both physical and virtual workloads under a single managed solution.
Digital Realty operates prominently within the Canada data center colocation market, providing a wide range of services that include colocation, interconnection, and data center solutions designed for varying business requirements. The company boasts a strong market presence, bolstered by its extensive portfolio of data centers that are strategically located across key Canadian cities.
Digital Realty's advanced facilities utilize state-of-the-art technologies to ensure optimal performance and energy efficiency, appealing to businesses keen on innovation. The company is also actively engaged in mergers and acquisitions, which have significantly expanded its capabilities and market reach in Canada. By continually enhancing their service offerings and infrastructure, Digital Realty remains competitive in the landscape, aiming to drive the digital transformation of enterprises across the region.
Key Companies in the Canada Data Center Colocation Market Include:
Canada Data Center Colocation Market Developments
The Canada data center colocation market has seen significant developments recently, with a surge in demand due to cloud computing and digital transformation trends. Companies like Digital Realty and Equinix are expanding their footprints in major cities such as Toronto and Vancouver to accommodate this growth.
In March 2021, eStruxture announced the acquisition of all eight Canadian data centers owned by Aptum, comprising two in Montreal, five in Toronto, and one in Vancouver, along with the colocation clientele and relevant personnel. The transaction was finalized at the conclusion of April 2021, resulting in eStruxture increasing its presence to 14 facilities across the country, encompassing more than 600,000 square feet and 100 megawatts of IT capacity.
Additionally, regulatory support for clean energy initiatives is driving investments toward sustainable infrastructure within the data center sector. Over the last couple of years, Vantage Data Centers has been notable for building new locations to meet rising demand, while CyrusOne has focused on enhancing its services to clients by leveraging advanced technologies.
Canada Data Center Colocation Market Segmentation Insights
Data Center Colocation Market Type Outlook
Data Center Colocation Market Deployment Type Outlook
Data Center Colocation Market End User Outlook
| Report Attribute/Metric Source: | Details |
| MARKET SIZE 2023 | 3.65(USD Billion) |
| MARKET SIZE 2024 | 4.5(USD Billion) |
| MARKET SIZE 2035 | 18.0(USD Billion) |
| COMPOUND ANNUAL GROWTH RATE (CAGR) | 13.431% (2025 - 2035) |
| REPORT COVERAGE | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| BASE YEAR | 2024 |
| MARKET FORECAST PERIOD | 2025 - 2035 |
| HISTORICAL DATA | 2019 - 2024 |
| MARKET FORECAST UNITS | USD Billion |
| KEY COMPANIES PROFILED | Cogeco Peer 1, Digital Realty, Rock Networks, eStruxture, CyrusOne, QTS Realty Trust, Interxion, IBM, Daisy Group, Cologix, CentriLogic, Equinix, Hivelocity, Vantage Data Centers, TPX Communications |
| SEGMENTS COVERED | Type, Deployment Type, End User |
| KEY MARKET OPPORTUNITIES | Growing demand for cloud services, Enhanced edge computing support, Increased regulatory compliance needs, Expansion of renewable energy usage, Rising focus on hybrid IT solutions |
| KEY MARKET DYNAMICS | increasing demand for cloud services, need for data security, rising energy costs, regulatory compliance requirements, growth of IoT applications |
| COUNTRIES COVERED | Canada |
Frequently Asked Questions (FAQ) :
The Canada Data Center Colocation Market is projected to be valued at 4.5 billion USD in 2024.
By 2035, the market is expected to reach a valuation of 18.0 billion USD.
The market is expected to grow at a CAGR of 13.431% during the period from 2025 to 2035.
The Retail Colocation segment is estimated to be valued at 10.0 billion USD in 2035.
The Wholesale Colocation segment is projected to reach a valuation of 8.0 billion USD by 2035.
Major players in the market include Digital Realty, Equinix, and Cogeco Peer 1 among others.
In 2024, the Retail Colocation segment is valued at 2.5 billion USD.
The Wholesale Colocation segment is valued at 2.0 billion USD in 2024.
The primary growth drivers include rising data consumption and the increasing need for cloud services.
The current global economic situation is likely to bring both challenges and opportunities to the market.
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Team Lead - Research she holds an experience of about 6+ years in market research and business consulting, working under the spectrum of information communication technology, telecommunications and semiconductor domains. aarti conceptualizes and implements a scalable business strategy and provides strategic leadership to the clients. her expertise lies in market estimation, competitive intelligence, pipeline analysis, customer assessment, etc.
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