The Stack Archive News Article

Majority of colocation revenue comes from just 20 cities

Mon 15 Jan 2018

The worldwide colocation market became increasingly concentrated on a select group of cities last year, according to new research.

59% of global revenue in the retail and wholesale colocation market was generated in just 20 cities in the third quarter of 2017, with more than a quarter being made in five metros alone.

Topping the list are London, New York, Shanghai, Tokyo and Washington, which combined account for 26% of revenue across the globe.

The news comes as research by London & Partners found that the UK’s capital city received by far and away the most venture capital investment of any city in Europe.

As well as signifying London’s continued dominance in the worldwide technology market, the study is also good news for those in the dominant cities, after it was found that $20 billion (approx. £14.5 billion) worth of data centre merger and acquisitions were carried out in 2017.

In the U.S., the Washington and Northern Virginia metro area is particularly noteworthy, given its continued high pace of growth, as it solidifies its position as the most densely populated data centre region in the world.

colo revenue by metro

Alongside Washington, three Asian cities had annualised growth rates of more than 15%. These were Shanghai, Beijing and Hong Kong. All four of these saw higher growth in wholesale compared to retail.

John Dinsdale, a chief analyst and research director at Synergy Research Group, said: “The broad picture is that data centre 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.”

The next five metros to take the lion’s share of colocation revenue were Chicago, Dallas, Frankfurt, Silicon Valley and Singapore, which accounted for 15%. Following on from those, ten major cities including Amsterdam, Paris and Hong Kong took 18%. The remaining 41% of colo revenue was made in the rest of the world.


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