Metro data center business holds firm – report | Light Reading

Metro data center business holds firm – report | Light Reading

Despite much industry talk about edge computing, and the importance of moving compute and storage resources closer to the customer in order to reduce latency times, it has still to translate into a material impact on retail and wholesale colocation revenues generated by metro data centers.

This was one of the key findings from Synergy Research Group, which reports that just 25 metro areas accounted for 65% of worldwide colocation revenues during Q2.

This means business as usual. Over the last 20 quarters, pointed out the research firm, the top 25 metros have consistently accounted for 63-65% of the total market.

“Hyperscale operators are a large and high-growth source of revenue for colocation providers, and they are often relying on colocation providers to help better serve customers in the major economic hubs,” said Synergy.

Synergy does not envisage a change in current market trends anytime soon. No forecasts are in the pipeline that show a decline in the importance of key metros within the total colocation market.

Movers and shakers
Ranked by Q2 revenue, the top five metros are Washington, Tokyo, London, New York and Shanghai. They account for 27% of the worldwide market. The next 20 largest account for another 38% share.

The world’s three largest colocation providers are Equinix, Digital Realty and NTT. Somewhat teasingly, Synergy said “one of those three” is the market leader in 17 of the top 25 metros.

Equinix, which seems to be in expansionist mode, was identified by Synergy as retail colocation leader in 16 of the top 25 metros.

In the wholesale segment, Digital Realty is leader in seven. NTT, Global Switch and GDS have retail leadership “in at least two metros.”

Other colocation operators that feature heavily in Synergy’s top 25 metros include 21vianet, @Tokyo, China Telecom, China Unicom, CoreSite, CyrusOne, Cyxtera, KDDI and QTS.

Those cities with the highest colocation growth rates (above 20% when measured in local currencies) are San Paulo, Beijing, Shanghai and Seoul.

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Ken Wieland, contributing editor, special to Light Reading

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