451 Research projects that global colocation and wholesale market revenue will top $48bn by 2021 in its latest quarterly release of its Datacenter KnowledgeBase (DCKB), which tracks nearly 4,500 data centers operated by 1,193 companies worldwide.
In Q3 2016, the data center colocation and wholesale market saw $28.9bn in annualized revenue. The majority of this revenue (42%) was generated in North America, with Asia-Pacific generating 31%.
Following a year of significant M&A activity in 2015, the first three quarters of 2016 maintained the momentum with notable industry consolidation that included Equinix completing its acquisition of Telecity Group, Tierpoint buying Windstream and Digital Realty Trust taking on eight of Equinix’s European data centers, among many other deals.
The data center market continues to grow, not only in many of the main markets, but increasingly in ‘edge’ markets outside of the global top 20. “Interest in edge markets is one of the factors driving consolidation,” notes Leika Kawasaki, senior analyst, Datacenter Initiatives at 451 Research. “Over the next one to two years, we expect to see growing interest from top providers and investors in markets outside of the top 20, particularly in Asia and Latin America.
In terms of annualized colocation and wholesale revenue, as of Q3 2016 Equinix and Digital Realty remained the global leaders, with 9.5% and 5.7% share, respectively. Once the Equinix acquisition of Verizon's datacenter business closes in mid-2017, Equinix market share is expected to expand to 11.4% of global annualized revenue, equivalent to double that of the second-largest provider, Digital Realty Trust.