M&A activities help Equinix, Digital Realty and NTT maintain colo market lead

30 May 2018 | James Pearce

Equinix, Digital Realty and NTT have maintained a strong lead in the colocation market, with the gap between them and others maintained by a recent spate of M&A activity, according to Synergy Research Group.

Equinix is out in front with a 13% share of the Q1 2018 co-location market, holding a significant lead over second placed Digital Realty, which has just over 8% of the Q1 market. NTT’s market share was 6.2%, the figures showed.

Combined, the three leading companies control almost 28% of global market share and this has increased over the last 12 months.

Digital Realty leads the smaller wholesale colocation space with a 28% share of retail colocation. Both have benefitted from M&A activity in the past year, including Equinix’s A$1 billion acquisition of Metronode assets in Australia, and its recently closed buy of the Infomart data centre in Dallas. Digital Realty, meanwhile, has bought DuPont Fabros in a $7.6 billion merger

The closest competitors to the big three are KDDI/Telehouse and China Telecom who both have a 3% market share, followed by a group of operators that each has a 2% share – CyrusOne, Interxion, Cyxtera, Global Switch and Coresite.

Overall, the market has seen steady expansion across all regions, with Asia Pacific and Latin America seeing the highest growth rates. Notably, China, Hong Kong, Australia, Japan and Singapore all saw the highest growth rates in APAC, where NTT is the biggest provider. 

Equinix dominates in EMEA and Latin America, and was ranked second behind in North Amerca behind Digital Realty and third in APAC.

"When it comes to operating data centres and colocation services, scale and geographic reach are important," said John Dinsdale, a chief analyst and research director at Synergy Research Group. "Enterprises are pushing more of their data centre operations into colocation facilities and are also aggressively driving more workloads onto the public cloud, where cloud providers themselves use a lot of colocation facilities. 

"Satisfying the needs of those enterprises and cloud providers often requires a large and widely distributed data centre footprint. In order to help achieve that scale there needs to be constant investment in existing data centres, in addition to which we’ve seen $42 billion in data centre M&A deals over the last 36 months, with Equinix or Digital Realty alone accounting for half of the total. There are good reasons why those two are the leading players in the colocation market."

Topics: Equinix, Digital Realty, NTT, SRG, colocation, data centre