Data Center Colocation Market Predicted To Grow To $36 Billion

By Christine Kern, contributing writer

A study by information technology research and advisory company 451 Research anticipates that the global colocation market annualized revenue will reach $36.1 billion by the end of 2017.  These are the predictions found in its latest quarterly Datacenter KnowledgeBase (DCKB) release. The DCKB database covers 3,796 individual data centers operated by 1,094 data center companies worldwide.

Currently, the data center colocation market totals $22.8 billion in annualized revenue, with 74.8 percent of this revenue in Q1 2015 from local providers with less than $500 million in annualized colocation revenues.

451 Research estimates that the global colocation market will grow in terms of total operational square feet from today’s 108.9 million square feet to a projected 149.7 million square feet by the end of 2017.

451 Research estimates that today, less than half (42.58 percent) of the world’s total operational space for colocation (space supporting IT equipment) is in North America.

“This remains an extremely fragmented industry,” Kelly Morgan, research director, North American Datacenters, explains in the press release. “The majority of colocation facilities are provided by local operators with only one to three facilities each. However, it is becoming harder for them to compete with the more geographically diverse providers that are now entering many local markets. We will see continued consolidation in this sector.”

“Colocation continues to be the bedrock for much of Cloud 2.0,” says Katie Broderick, research director, 451 Research. “The global colocation market is the physical (facilities and networking) underpinning of both enterprises’ off-premises computing and hosting and cloud service providers’ value-add services.”