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Home » Report: Ownership Of Data Centers Is Not Critical To Operating A Colocation

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Report: Ownership Of Data Centers Is Not Critical To Operating A Colocation

This is the seventh consecutive quarter with double-digit growth in customer load.

December 11, 2015
KEYWORDS colocation services / data centers / multi-tenant data center
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Customer IT load at multi-tenant data centers (MTDC) grew 11% year-over-year in Q3 of 2015, according to a new release from IHS. This is the seventh consecutive quarter with double-digit growth in customer load. Recent news from CenturyLink and rumors of Verizon and AT&T’s sale of data center assets has raised some questions on the state of the overall colocation market and whether it’s a sign that growth is slowing. IHS believes that these business’ actions are not a reflection of the overall MTDC market health but rather, a strategic decision by some companies to specialize in colocation and IT services as opposed to ownership of real estate.

IHS has seen that telecommunication companies’ colocation business has been slower than market average for quite a while now, so it’s not a surprise that these companies are looking at ways to better manage that portion of their business. It is not about these companies wanting to exit the market, as evidenced by CenturyLink’s CEO Glen Post’s comment on their Q3 earnings call: “We expect colocation services will continue to be a service our customers will look for us for, but we do not necessarily believe we have to own the data center assets to be effective in delivery of those services.” Rather, the sale of data center assets is about these companies not wanting to invest more capital in a business model that is not working for them.

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