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The demands on digital infrastructures are growing rapidly – driven by data-intensive applications, cloud services, AI models, and the progressive digitalization of the economy. Companies are increasingly challenged to design their IT environments to be flexible, secure, and efficient. The colocation model plays a central role in this: the outsourcing of server and network technology to professionally operated data centers.
Colocation offers companies the opportunity to operate their own hardware in a highly available environment – without the effort and costs of building and operating their own data center. In Germany, this market segment has developed rapidly in recent years: it not only shapes the structure of the data center landscape but is also increasingly becoming a driver for innovation, sustainability, and economic value creation.
This article provides an overview of the current status of the colocation market in Germany. It highlights key trends, regional focal points – particularly the Rhine-Main area with Frankfurt as the most significant location – as well as regulatory developments and future perspectives.
Germany is currently one of the most important colocation markets in Europe – and continues to grow. The trend towards outsourcing IT infrastructures to specialized data centers is also reflected in the distribution of capacities: Around 70% of the total data center capacity in Germany is now accounted for by colocation facilities. This corresponds to approximately 1,360 megawatts out of a total of 1,955 MW of available IT power – and the trend is rising.
Further evidence of increasing importance: Almost half of all data center capacities in Germany are now located in colocation buildings. The classic distinction between in-house operation (enterprise data centers) and external infrastructure is increasingly blurring, as even large companies and hyperscalers like Amazon, Microsoft, and Google are increasingly relying on colocation space.
The strength of the German market is particularly evident in an international comparison. According to DataCenterMap, Germany currently operates more colocation data centers (425) than the UK (420), placing it at the top in Europe. The market dynamics are also reflected in ambitious expansion plans: Within the next five years, the colocation market’s capacity is expected to more than double, from its current approximately 1.3 GW to over 3.3 GW.
At the same time, there is a consolidation in the market: the number of smaller colocation data centers (from about 50 kW IT power) is decreasing. Many of these operators are discontinuing their offerings or relocating servers to larger, more efficient facilities. This underscores the trend towards economies of scale and professional structures in data center operations.
A look at the geographical distribution of colocation capacities shows a clear concentration in a few metropolitan areas. The undisputed leader in Germany is the Frankfurt am Main metropolitan region – it forms the heart of the German data center landscape.
Almost two-thirds of the available IT power in colocation data centers is accounted for by the greater Frankfurt area. The region benefits from its central location in Europe, excellent network connections (e.g., through the DE-CIX internet exchange), proximity to financial institutions, industry, and international corporations – as well as a historically grown infrastructure.
Frankfurt is one of the most important data center locations not only nationally but also internationally. The city is part of the so-called FLAP-D market – one of the most important European clusters for digital infrastructures, consisting of Frankfurt, London, Amsterdam, Paris, and Dublin.
In addition to Frankfurt, other locations such as Berlin-Brandenburg and Munich are also increasingly coming into focus for investors and operators. Demand for colocation space is growing particularly in Berlin. In Munich, operators are confident about further market development.
However, the high concentration in metropolitan areas also brings challenges. In Frankfurt and Berlin, for example, the first signs of overload are already appearing: the availability of suitable land and sufficient power connection capacities is increasingly becoming a bottleneck for further expansion. This leads to rising costs, longer approval procedures, and growing competition for resources – and could lead to greater decentralization in the medium term.
The colocation market in Germany is in a dynamic transformation phase. In addition to continuous growth, several structural developments and trends can be observed that will shape the market environment in the coming years.
1. Capacity Expansion and Market Consolidation
Demand for data center space – especially for highly available, sustainable, and scalable colocation offerings – is growing continuously. Forecasts suggest that the available colocation capacity in Germany will more than double from currently around 1.3 GW to over 3.3 GW within the next five years. This represents one of the strongest growth paths in European comparison.
In parallel, the consolidation of the market continues: smaller operators are increasingly disappearing from the market or being acquired. Large providers dominate the scene, leading to more professional structures, more efficient operating models, and greater standardization.
2. Increasing Importance of Hybrid IT Architectures
While companies previously had to choose between on-premises, colocation, or cloud, hybrid architectures are now increasingly gaining ground. Companies combine various operating models to optimally balance flexibility, security, and performance. In this context, colocation often serves as a stable backbone for business-critical applications – complemented by cloud components for scalable workloads.
3. Demand from Hyperscalers and National Cloud Providers
International hyperscalers such as Amazon Web Services, Microsoft Azure, or Google Cloud heavily rely on colocation space to expand their presence in Germany – not least to efficiently meet local data protection requirements and operational regulations. At the same time, more and more national providers and system integrators also use colocation to flexibly scale their services without having to invest in data center infrastructure themselves.
