Market Insight

Colocation data center revenue projected to grow near 10% in 2017

April 13, 2017

Liz Cruz Liz Cruz Associate Director, Data Centers, Cloud & IT Infrastructure

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Wholesale and retail colocation data center revenues crossed over the $20 billion mark in 2016 and the current year is already showing promise. Based on recent findings from the IHS Markit Multi-tenant Data Center Market Tracker, growth will come close to 10% for 2017.

Highest rates of growth will come from regions of Asia, as has been the case for a few years. China’s colocation market is projected to grow nearly 14% over the next five years dominated largely by the big state-owned telecommunication providers China Telecom and China Unicom.  Singapore also has double-digit growth projections for the forecast period, as it continues to be a major access point into the rapidly developing SE Asian markets of India, Thailand, Malaysia, Indonesia and the Philippines.

One big market that just keeps getting bigger is Ashburn, VA; which already has well over half of the world’s internet traffic traveling through it and still has a five-year CAGR of 13%. Commonly referred to as “data center alley,” Ashburn has a rich fiber network, data center friendly tax breaks, and relatively low property costs, while also being able to provide low-latency connection to the major public and private enterprises in the Washington DC area.

Overall, the colocation market has seen strong growth over the last few years, with the 2015 dip in growth shown below largely due to the weakening of the Euro against the USD. IHS Markit fully expects the focus of colocation providers on direct connectivity with major cloud providers to further drive adoption of colocation over the next five years, helping to underpin a projected 8% five-year CAGR for total market revenues. 

For more information please contact:

Liz Cruz

Associate Director of Data Center Infrastructure

liz.cruz@ihsmarkit.com

+1 512 582 2028

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About IHS Markit (www.ihsmarkit.com)

IHS Markit (Nasdaq: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world’s leading financial institutions.  Headquartered in London, IHS Markit is committed to sustainable, profitable growth.

 

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