What is driving the demand for colocation
A convergence of technological advancements and shifting business priorities is driving increased demand for data centre colocation. According to our Vision 2030 research, three-quarters (75%) of IT decision-makers anticipate the volume of data they manage will increase in the next decade. That will clearly fuel demand for colocation space over the coming years. The continued rise of 5G networks, the expanding use of IoT devices, and the need for high-density computing systems will also contribute to this trend.
As businesses face growing pressure to scale their IT infrastructure, they must also address cybersecurity risks, enhance energy efficiency, and meet sustainability goals. In response, colocation data centres are becoming essential for reliability and connectivity. They provide the computational power needed to stay competitive while addressing environmental and operational challenges.
2025 colocation trends
Amid these rapid advancements in technology and rising connectivity demands, let’s explore the key data centre colocation trends that will shape the industry in 2025 and beyond.
Critical National Infrastructure classification
The recent designation of data centres as Critical National Infrastructure is set to significantly reshape the industry in 2025. While the move reflects an increasing dependence on digital services and ensures enhanced government support during incidents such as cyberattacks, IT outages, or extreme weather events, many consumers are still unaware of the essential role data centres play in their daily digital lives.
This year, efforts to educate the public will be crucial in raising awareness and highlighting the importance of these facilities, as well as the career opportunities within the sector.
Retrofitting for sustainability
Sustainability will continue to drive significant changes in data centre strategies over the next few years, with retrofitting becoming an increased focus. Rather than constructing new facilities, providers will look at upgrading existing infrastructure to minimise the environmental impact. In urban environments, where space is limited, retrofitting is often the most feasible solution. However, operators must carefully manage operational disruptions and comply with safety and regulatory standards.
Managed services
The relationship between data centre colocation providers and their customers is shifting towards a more collaborative, partnership-driven model. Organisations now expect more than just space, power, and cooling, and seek a true extension of their team.
To meet these changing customer demands, providers are increasingly providing a broader range of managed services, such as time-as-a-service and customer success management solutions. These offerings will grow in importance to help businesses meet their evolving IT needs, ensuring smooth operations, increased agility, and a stronger focus on growth and innovation.
Increase in security compliance
As cyber threats grow more sophisticated and regulatory requirements become increasingly stringent, security compliance will continue to play a pivotal role in the data centre colocation market in 2025. To mitigate operational risks and maintain a competitive advantage within the data centre market, providers must deliver advanced physical security measures such as comprehensive CCTV surveillance, 360° monitored perimeter fencing, and dedicated on-site security personnel 24/7, all while aligning with stringent frameworks like the EU’s Digital Operational Resilience Act (DORA) a new regulation for the finance industry to better manage technology risks.
In addition, the increasing global emphasis on AI governance, including regulations focused on data protection and the ethical use of AI technologies, has elevated compliance requirements. This commitment to creating secure, regulation-compliant environments is essential for fostering trust among organisations entrusting their sensitive and mission-critical operations to colocation facilities.
Liquid cooling
With the rise of AI and edge computing, data centre providers are adopting liquid cooling to efficiently handle the growth in high-capacity workloads. While traditional air cooling systems continue to serve providers well, the growing need to manage high-density workloads will drive a shift to liquid cooling technologies. By 2030, liquid cooling is likely to become a key solution for improving energy efficiency and performance, allowing data centres to meet the evolving needs of modern computing while supporting sustainability and operational goals.
The future of colocation
To meet compliance and future connectivity needs, organisations must reassess their infrastructure strategies. As digital connectivity demand grows, forming the right partnerships becomes essential. Nearly 48% of businesses are already exploring commercial partnerships with colocation providers, with 22% planning to do so soon, according to our research.
Colocation data centres like Telehouse offer scalable infrastructure and access to a vast ecosystem of cloud, content, and service providers, driving them to become increasingly vital for businesses by 2030. These facilities balance interconnectivity, cost efficiency, and sustainability, helping businesses overcome challenges while ensuring reliable and resilient service delivery.
Why choose Telehouse data centres and colocation
Telehouse data centres are the perfect solution for businesses looking to achieve operational efficiency, enhance connectivity, and support their digital transformation goals. With our London Docklands facilities offering unmatched connectivity, we provide access to a diverse ecosystem of carriers, cloud services, and content providers.
As colocation trends evolve to accommodate greater interconnectivity and scalability, Telehouse ensures your business is ready for 2025 and beyond. Whether linking global offices or connecting with key providers, we offer a secure, reliable home for your data, supporting your growth in an increasingly connected world.
Learn more about our data centre services.