New Q4 data from Synergy Research Group shows that just five metro areas account for 27% of worldwide retail and wholesale colocation revenues. Ranked by revenue generated in Q4 the top five metros are New York, London, Washington, Tokyo, and Silicon Valley. The next ten largest metro markets account for another 25% of the worldwide market. Those top 15 metros include six in the US, four in the EMEA region and five in the APAC region. Across the 15 largest metros, retail colocation accounted for 76% of Q4 revenues and wholesale 24%. In Q4 Equinix was the market leader by revenue in eight of the top 15 metros and Digital Realty was the leader in two more. Other colocation operators that featured heavily in the top 15 metros include NTT, DuPont Fabros, Interxion, China Telecom, 21Vianet, KDDI, @Tokyo, SingTel, Global Switch, CoreSite, CyrusOne, and TelecityGroup (since acquired by Equinix).
In 2015 colocation revenue growth in the top 15 metros outstripped growth in the rest of the world by three percentage points, so the worldwide market is slowly being concentrated more in those key metro areas. Top 15 metros with growth rates of 20% or more (measured in local currencies) were Shanghai, Beijing, Hong Kong, Frankfurt, Amsterdam, and Singapore. Among the top five metros, Tokyo had the highest growth rate.
“Colocation is a complex market driven by a range of different factors, but it is quite evident from our in-depth research that the market is highly concentrated around a relatively small number of metro areas and is slowly gravitating even more towards those metros,” said John Dinsdale, a chief analyst and research director at Synergy Research Group. “While major cloud providers tend to locate their hyperscale data centers well away from big urban areas, clearly the majority of colocation clients have a strong desire to locate their computing facilities close to major centers of commerce. This trend is advantageous to large colocation operators with a data center footprint that spans those key metro areas.”