More than a quarter (27%) of worldwide retail and wholesale colocation revenues are being generated in just five metro areas, new data from Synergy Research Group indicates.
Ranked by revenue generated in the fourth quarter of 2015, the top five metros are New York, London, Washington, Tokyo and Silicon Valley.
The next 10 largest metro markets account for another 25% of the worldwide market. These are Chicago, Dallas, Frankfurt, Shanghai, Singapore, Amsterdam, Hong Kong, Beijing, Los Angeles, and Paris.
Of the top 15 metros, six are in the United States, four in the EMEA region and five in the Asia-Pacific region. Across the 15 largest metros, retail colocation accounted for 76% of fourth-quarter revenues and wholesale 24%.
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, 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,” said Dinsdale. “This trend is advantageous to large colocation operators with a data center footprint that spans those key metro areas.”