Level 3, Equinix, AT&T Among Data Center Colocation Leaders

Written by James Anderson
July 17, 2017

Complexity, cost and the need for security are driving the growth.

A new study shows the profit that partners can earn from data-center colocation sales now and in the near future.

MarketsandMarkets predicts the colocation market to go from $32 billion this year to $62 billion in 2022. That is an annual growth rate of 14.6 percent.

The study lists the increased complexity of data centers as well as the need for reliable, secure and cost-effective infrastructure as major drivers for the colocation market.

“The data center colocation market is expected to be growing rapidly because of the increasing number of users opting for cost-effective and energy-efficient data center solutions,” the study said.

Data center colocation consists of two main types: wholesale and retail. Wholesale will grow at a higher rate over the next five years, the study says.

“The wholesale colocation provides a large IT space, along with cooling and power infrastructure,” the study said. “Additionally, it provides the users with benefits, such as economics of scale by reduced power and cooling cost, high bandwidth, and reduced total cost of ownership.”

Small and medium-size businesses, which enjoy fewer infrastructure requirements, will grow the fastest in colocation, according to the study.

MarketsandMarkets listed 25 vendors, in alphabetical order, as leading colocation providers: AT&T, China Telecom, Cogent Communications, Contegix, CoreSite Realty Corporation, CyrusOne, Cyxtera Technologies, Digital Realty Trust, Fabros Technology, Equinix, Fibernet, Global Switch, Internap, Interxion, Keppel Data Center, Level 3 Communications, NTT Communications, PhoenixNAP, Rahi Systems, Singtel, STT GDC, Telehouse-KDDI, Telstra, TeraGo Networks, and Verizon.

The researcher last week released its forecast for the cybersecurity market, which is worth approximately four times more than that of data center colocation. MarketsandMarkets’ colocation estimates are higher than what 451 Research predicted earlier this year.

We saw Equinix and Verizon, two of the suppliers listed above, partner with each other around Equinix colocation services back in March. That deal came a few months after Verizon agreed to sell its data-center business to Equinix for $3.6 billion.