Equinix and Digital Realty Lead in an Increasingly Global Colocation Market

RENO, NV, August 27, 2013

New Q2 data from Synergy Research Group shows that the ten colocation market leaders in aggregate accounted for 34% of all colocation revenues and on average have a colocation facility footprint spanning eleven countries. While Equinix and Digital Realty are the clear market share leaders, it is NTT that has the broadest geographic scope with colocation facilities in 21 countries. DuPont Fabros was the leading operator that has a single-country focus – it was ranked number twelve by quarterly revenues. Despite the positive impact of cloud services growth on the service provider colocation segments, Synergy’s colocation forecast shows annual growth rates in the US, Japan and other well-developed markets dropping below 7%, emphasizing the importance of higher-growth under-developed countries to colocation market leaders.

Total colocation revenues generated in Q2 amounted to $5.2 billion, with retail operations accounting for 78% of the total and wholesale 22%.Carrier neutral colocation accounted for 60% of retail revenues. Total colocation revenues grew 9% year on year with wholesale growth outstripping retail growth. By region North America accounted for the largest share of worldwide revenues (44%) but it was also the region with the lowest growth rate.

“While there is still a place for single-country colocation operators, it is quite clear that scale and geographic footprint are becoming increasingly important success factors” said Synergy Research Group’s John Dinsdale. “As the boom in cloud infrastructure services continues the mix of colocation business will continue to tilt in favor of globally oriented service provider customers and away from the enterprise, further favoring large-scale multi-national operators. It is no coincidence that both Equinix and Digital Realty continue to gain market share despite the plethora of competitors in the market.”