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Washington, DC is now the largest colo market in the world

Mon 10 Apr 2017

Washington DC

A new report by Synergy Research shows that due strong growth in 2016, Washington, DC is now the largest metro market for data center colocation in the world.

DC overtook New York by a small margin in the fourth quarter of last year, boosted in part by the inclusion of Northern Virginia in consideration of the DC metro. New York won the battle for full-year 2016, but at a growth rate significantly lower than the national average.

Washington, DC and Dallas had the strongest growth in wholesale colocation data center revenue in the U.S. last year, expanding at a rate of almost twice the national average. Silicon Valley along with New York, on the other hand, had growth rates that were lower than the national average.

Worldwide figures show that after Washington, DC and New York, the top ten colocation markets include Tokyo and London, Silicon Valley, Shanghai, Dallas, Singapore, Frankfurt and Chicago.

John Dinsdale, a Chief Analyst and Research Director at Synergy, attributes the strong revenue growth to client requirements for localized data center facilities in metropolitan areas, as well as to an increase in cloud adoption.

“Colocation is an increasingly global market but also demands highly localized services focused on data center facilities close to clients in key economic hubs. This combination of global and local factors has been a major factor in driving the ongoing industry consolidation,” Dinsdale said.

“Another key feature in the market is the aggressive growth of cloud which has helped the US wholesale market to grow twice as rapidly as retail colocation.”

In the top ten US metropolitan areas for wholesale colocation, Digital Realty is the leader in five, while Equinix is the leader in three.

Digital Realty’s dominance in the colo market received a boost with the 2015 acquisition of Telx, for close to $1.9 billion USD. The Telx acquisition doubled the Digital Realty data center footprint, and significantly increased the company’s presence in top-tier metropolitan market areas.

Earlier this month, Equinix announced a planned expansion of its data center business in the Washington, DC metro area, acquiring 34 acres of land in Ashburn, Virginia. The land, which is near the existing IBX data center estate, is expected to host five new data center facilities and add over one million square feet of space to the Equinix DC offering.

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