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Data centre colocation market to reach US$33.2 billion in 2018: 451 Research

Adrian M. Reodique | April 4, 2016
Asia Pacific has the largest total operation space for colocation in the world (40.1 percent), according to 451 Research.

The annual revenue for data centre colocation market is projected to reach US$33.2 billion worldwide by 2018.

This is according to the latest quarterly Data Centre Knowledgebase (DCKB) - released by IT research and advisory company 451 Research - which tracks nearly 4,800 data centres operated by over 1,286 companies globally.

In the fourth quarter of 2015, the data centre colocation market saw an annual revenue of US$27 billion. Majority of this revenue (54.6 percent) came from local providers with sub-US$500 million in annualised colocation revenues.

"2015 was a record year for the data centre, hosting, and managed services sector, with the highest number of deals since we began tracking it. But there are still hundreds of data centre providers around the world that will continue to consolidate, either to gain scale or add services or both," said Kelly Morgan, Research Director, North American Data Centres, 451 Research. "This is not because the industry is in trouble; the move to cloud continues to drive strong demand for leased data centre space. It is because the industry is maturing, and providers are becoming more strategic in their approach to customers."

Equinix leads in the combined wholesale and retail colocation market, with 8.1 percent share of global annualised and retail colocation revenue. In terms of operational square feet, Digital Realty topped the list with a global share of 7.8 percent.

Additionally,  451 Research estimates that the global colocation market for total operational square feet will grow from today's 132.4 million square feet to 176.5 million by the end of 2018. Based on their estimates, Asia Pacific has the largest total operation space for colocation globally (ie. space supporting IT equipment) at 40.1 percent. Growth in this region has been fueled by the sheer size of the economy and a less entrenched installed base of enterprise facilities. Some countries in Asia have also been supporting their colocation industries with special zones and tax treatment.

"Colocation is quickly becoming the nexus of both cloud and enterprise IT," said Katie Broderick, Research Director at 451 Research. "The colocation market is serving as data centre arms dealer to both enterprises and the cloud. In this process, colocation is often becoming the strategic connection point between the two."


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