News Feature | January 6, 2015

6 Percent Of Data Centers Account For 52 Percent Of The Market

Christine Kern

By Christine Kern, contributing writer

6 Percent Of Data Centers Account For 52 Percent Of The Market

Data from 451 Research’s Datacenter Knowledge Base (DCKB) has found that the global colocation market had a run rate of more than $25 billion in revenue — with 6 percent of data center firms accounting for more than half of global revenue.

The DCKB database tracks nearly 3,700 individual data centers from 1,086 data center companies serving North America, EMEA, APAC, and LATAM. Data from DCKB shows the top 10 data center firms account for 28 percent of the total revenue with the top 60 accounting for 52 percent. The remaining 48 percent is generated by more than 1,000 additional companies, many of them strong regional players. According to a Data Center Consulting blog from analysts Greg Zwakman, Dasha Davidenko, Kathleen Frodyma, Kelly Morgan, and Jeff Paschke, “The pattern of market concentration at the top with a long tail at the bottom is echoed when we look at each global region’s metro markets, with the top four markets in each region accounting for an average of 37 percent of total revenue.”

“At its heart, the multi-tenant data center business is a regional business,” says Zwakman, 451 research director of quantitative services, in the report press release. “So despite active consolidation and some concentration at the top, much of the market remains highly fragmented, with a mix of national and local players.”

451 Research explains over the past decade, investment in multi-tenant data centers has focused on large markets with large numbers of potential tenants. “We are seeing growing interest in markets outside of those top few cities, however” says Morgan, 451 research director for multi-tenant data centers in North America. “This is for several reasons, such as to reduce latency, to target medium-sized local businesses, or because operating costs are lower. We expect to see strong growth in several of these secondary markets over the next few years.”

In addition, vendors are also actively expanding, with 176 expansions and 134 new builds globally. Almost two-thirds of the planned expansions are currently focused on North America.