DC, NY and Dallas among Fastest Growing Colocation Markets

By Balazs Szekely, Associate Editor

Five metros have outpaced the national average over the past twelve months in terms of revenue growth rate in the colocation business, according to Synergy Research Group. Silicon Valley, Washington, D.C., Dallas, New York, Chicago and Los Angeles account for 59 percent of the nation’s total retail and wholesale data center revenue stream, the data shows.

It comes as no surprise that Silicon Valley has seen the strongest revenue growth rate over the last year, at about twice the speed of the national market. New York and Washington, D.C. alone account for 30 percent of the total influx. Much like New York, Dallas’ and Chicago’s growth rate is also marginally ahead of the national average. The research also shows that New York is the largest metro market for colocation in the world, though it is closely followed by London, Tokyo and Washington DC. The top ten on the global ranking is rounded out by Silicon Valley, Dallas, Singapore, Frankfurt, Chicago and Los Angeles.

Equinix is the market leader in four of the six major US metros. The company would also have been the leader in New York, but the acquisition of Telx gave a decisive edge to Digital Realty—who is also the market leader in the Dallas metro.

“While colocation is an increasingly global market, in many ways it is also a highly localized service that is dependent on having access to specialized data center facilities that are close to the target client base,” said Chief Analyst and Research Director John Dinsdale of Synergy Research Group in a prepared statement. It is this combination of global and local factors that is now driving consolidation and M&A activities in the colocation industry,” he added.

Chart courtesy of Synergy research Group (via The Data Center Journal)