10 January 2017
| Alan Burkitt-Gray
Growth in the world’s top three colocation operators is outstripping growth in virtually all others in the sector.
Equinix, Digital Realty and NTT – numbers one to
three in the market, according to Synergy Research Group – grew 28%
in 2016 in aggregate, way ahead of numbers four to 10, which
grew 12%, and numbers 11-20, which grew by just 8%.
"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," said John
Dinsdale, a chief analyst and research director at
Growth in the top three is due to a combination of major
acquisitions and organic growth, says Synergy.
The biggest operator, Equinix, grew at 26%, says the company,
just ahead of number two, Digital Realty, which grew at 25%
year-on-year. But the fastest growth is recorded by NTT, which is number three in the market,
hitting 36% annual growth.
The Synergy data is based on figures from the fourth quarter of
2015 to the third quarter of 2016.
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
Synergy says that consolidation will continue to be a major
feature of the market, as evidenced by the recent announcement
that Equinix is acquiring 29 data centres from
Verizon, which is ranked second in the US retail colocation
The survey covers both retail and wholesale colocation. The
major countries with the highest growth rates were China, Hong
Kong and India, contributing to the Asia-Pacific region having
the highest growth rate.
Across the major regions, Equinix was the leader in Europe,
Middle East and Africa, ranked second in North America and
third in Asia-Pacific. Digital Realty was the leader in North
America and NTT the leader in Asia-Pacific.
Synergy notes that wholesale colocation revenues have been
growing more rapidly than retail colocation, though in 2016 the
growth rates were broadly similar. Equinix continues to have a
strong lead in retail colocation while Digital Realty holds a
similar position in wholesale colocation.
Notably, Digital Realty and NTT now have significant market
shares in both the retail and wholesale sectors, while Equinix
maintains a tight focus on retail operations.
Dinsdale continued the comparison with the cloud market. "In
both cases the ability to run large data centre operations
effectively and efficiently is vital to success," he said.
"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."