Thursday, November 23, 2017

Top global colos profit on global data centre boom

Wholesale colocation and retail colocation revenues grew in 2016 to similar figures, an historical achievement for the industry.

The year of 2016 will remain as one of the most active in recent years in the data centre space due to the many mergers and acquisitions, new builds and booming market demand.

With demand comes profit for some, and the world’s top three colocation players have benefited of the 9% growth of the colocation market in 2016 compared to 2015, according to Synergy Research.

Equinix, Digital Realty and NTT together saw their revenues jump 28% to an historic high. In addition, all the three expanded their colocation footprint at a global scale.

Beyond these companies, the other top ten operators grew their colocation revenues by 12% while the companies ranked 11-20 grew by 8%.

Apart from the three market leaders, other companies whose growth rates were well above average and who climbed the rankings included QTS, CyrusOne, CoreSite, China Telecom and KDDI-Telehouse.

Synergy Research predicts consolidation to continue to be a major feature of the market.

The company has based partially on Equinix’s recent acquisition of 29 data centres from telecommunications provider Verizon. Before the sale, Verizon ranked second in the US retail colocation market.


Geographically, data centre construction is happening in every region of the globe, with APAC having the highest growth rate.

The major countries with the highest growth rates were China, Hong Kong and India.

Across the major regions, Equinix was the leader in EMEA, ranked second in North America and third in APAC. Digital Realty was the leader in North America and NTT the leader in APAC.

Historically wholesale colocation revenues have been growing more rapidly than retail colocation, though in 2016 the growth rates were broadly similar.

Synergy Research added that Equinix continues to have a strong lead in retail colocation while Digital Realty holds a similar position in wholesale colocation.

Another change that happened in 2016 was regarding Digital Realty and NTT which now have significant market shares in both the retail and wholesale sectors, while Equinix maintains a focus on retail operations.

John Dinsdale, Chief Analyst and Research Director at Synergy Research, said: “In some senses colocation is following the same path as the cloud with market power gradually being concentrated in the hands of a few focused and deep-pocketed operators.

“In both cases the ability to run large data centre operations effectively and efficiently is vital to success and companies that are too diversified or unfocused will struggle.

“And the similarities don’t stop there – as cloud usage continues to explode, colocation growth opportunities are pulled along in the slipstream.”