The global market for co-location services rocketed past the $25 billion mark in 2014, according to a new study of 1,086 data center operators around the world by 451 Research. The growth underscores the broader trend of organizations outsourcing more of their infrastructure to specialized service providers, a shift that International Data Corp. predicts will bring an effective halt to the construction of new enterprise facilities within a couple of years.

That’s good news for co-location companies, which are benefiting from the phenomenon in more ways than one. First and foremost, the mounting pressure on CIOs to match the economies of the public cloud is driving a wide-spread reduction in activities that don’t directly contribute to the bottom line, which includes power and cooling management. As a result, IT organizations are moving bigger and bigger chunks of their infrastructure to rented floor space that includes those commodities in the price.

Second, the explosive adoption of hosted services that is fueling the trend is also generating demand from cloud providers such as the recently-funded DigitalOcean Inc., which are turning to co-location companies for help meeting growing business. These interlaced dynamics are providing tremendous revenue momentum for data center operators, not only for the top players but for small regional providers as well, according to 451 Research.

Much of the market is still concentrated in the hands of the incumbents, with the study finding that the 10 largest co-location companies controlled 28 percent of the $25 billion generated this past year and the top 60 owned 52 percent, but it’s mostly local providers that accounted for the remainder. That reflects steadily growing demand for co-location services beyond the major metropolitan areas to smaller and traditionally less-accessible regions with more narrowly-focused players.

Key international cities such as New York and London continue to lead in the number of data centers being built or expanded for co-location purposes, according to 451 Research, but the European, Middle East/Africa (EMEA) and Asia-Pacific regions are showing strong growth as well. That;s consistent with the findings of an earlier report from Synergy Research Group that found that Chinese companies are buying up floor space at twice the rate of the rest of the world as they work to catch up with Western competitors.

Latin America, which has traditionally existed on the sidelines of the industry, is making gains as well. The 451 Research study concludes that the region has seen a noticeable rise in the average revenue per facility during 2014 that now puts its at 5 percent of the global market.