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Colocation providers benefiting from hyperscale dash to the edge

Written by Wed 27 Mar 2019

Revenue colocation providers pocketed from hyperscale customers outpaced revenues received from other customers and enterprises last year, new data shows

Cloud and data centre market research company Synergy Research Group’s latest quarterly research on the global colocation market shows colocation providers are benefiting from a big boost in hyperscale business.

Synergy’s data covers the world’s four major regions and the 30 largest country markets. According to its Q4 and year-end research, the colocation market grew to over $34 billion in 2018.

While overall market growth was at 10 percent for 2018, revenues received from hyperscale operators grew by 24 percent, massively exceeding revenues from other service providers – such as telcos and non-hyperscale cloud providers – and what Synergy calls “enterprises” (all other industry verticals plus the government and public sector).

Edge creep

Hyperscale operators comprise the world’s major cloud and internet service firms, including the largest operators in IaaS, PaaS, SaaS, search, social networking and e-commerce.

The cloud and internet service giants are becoming colocation providers’ fasting growing customer category as they rapidly expand their data centre footprints and put edge facilities closer to major business centres.

“It comes as no surprise that hyperscale operators are providing a boost to colocation providers, as they are on a charge to rapidly extend their worldwide data centre footprint and in 2018 ramped up their capex by no less than 43%,” said John Dinsdale, a chief analyst at Synergy Research Group.

“In order to support this rapid growth they cannot just build their own data centres, so they also need to rely on colocation providers to lease out both large wholesale facilities and capacity at smaller edge locations. Hyperscale operators are becoming an ever-more important source of business for leading colocation companies such as Equinix, Digital Realty, Interxion, CyrusOne, QTS and GDS.”

Geographically, growth was strongest in the APAC region, followed by EMEA and North America. Among the 20 largest country markets, the highest growth rates were achieved in China, Brazil, Hong Kong, Japan, Germany and Singapore.

Written by Wed 27 Mar 2019


Cloud colocation hyperscale
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