20 Metro areas make up 59% of global colocation revenues
12 January 2018 | Natalie Bannerman
59% of global revenues comes from just 20 Metro areas, according to findings by Synergy Research Group.
According to the findings the top five Metros areas are Washington, New York, Tokyo, London, and Shanghai, which account for 26% of the worldwide market. And the remaining 15 Metro markets account for account for another third of the worldwide market. Of the 20, ten are in North America, four in the EMEA region and six in the APAC region.
“While we are seeing reasonably robust growth across all major metros and market segments, one number that jumps out is the wholesale growth rate in the Washington/Northern Virginia metro area. “It is by far the largest wholesale market in the world and for it to be growing at 20% is particularly noteworthy.” said John Dinsdale, a chief analyst and research director at Synergy Research Group.
Other findings reveal that across the 20 largest metros, retail colocation accounted for 72% of Q3 revenues and 28% for wholesale. In addition, Equinix was the market leader by revenue in eight of the top 20 metros in Q3 of 2017. Digital Realty would be the leader in five more if a quarter of the acquired DuPont Fabros operations were included in its numbers. Other colocation operators that were frequently featured in the top 20 metros include: 21Vianet, @Tokyo, China Telecom, CoreSite, CyrusOne, Global Switch, Interxion, KDDI, NTT, SingTel and QTS.
Over the last four quarters colocation revenue growth in the top five metros beat the rest of the world by two percentage points, so the worldwide market is slowly being concentrated more in those key metro areas. The top 20 metros with annualised growth rates of 15% or more were Shanghai, Beijing, Hong Kong and Washington/Northern Virginia. All four saw strong growth in both the retail and wholesale segments of the market, though growth in wholesale tended to be higher. Chicago also saw very strong growth in wholesale revenues, though in this metro retail colocation growth was relatively weak.
“The broader picture is that data center outsourcing and cloud services continue to drive the colocation market, and the geographic distribution of the world’s corporations is focusing the colocation market on a small number of major metro areas,” added Dinsdale.
Synergy Research Group recently released data on the growth rates of cloud market segments. According to its data cloud market segments grew by 24% to $180billon in 2017. Included in the report is six key cloud services and infrastructure market segments which is IaaS & PaaS, Hosted private cloud, Enterprise SaaS, UCaaS, Public cloud and Private cloud.