DC, New York lead world colocation market

Dive Brief:

About 59% of the world's colocation, or data center rental facility, revenue is held by 20 metropolitan cities, according to a Synergy Research Report from Q3 2017. Washington, D.C., New York, Tokyo, London and Shanghai accounted for more than one-quarter of the colocation market.
Retail colocation made up 72% of total colocation revenue from Q3, while wholesale accounted for 28%. Metro areas with an annualized growth rate of 15% or higher included Shanghai, Beijing, Hong Kong and Washington D.C./Northern Virginia. All four areas grew in the retail and wholesale markets, but wholesale slightly outpaced retail.
Washington D.C./Northern Virginia has a growth rate of 20% and is is the largest market for wholesale internationally. Data farms are abundant, and approximately 70% of the world's daily internet traffic runs through internet infrastructure in Loudoun County, VA.

Dive Insight:

As digital transformation continues to take hold on traditional data storage solutions, the markets surrounding storage also change. There are 2.5 quintillion bytes of data created daily in varying formats which force companies to reanalyze where and how they store it. Major cities are typically first to embrace digital solutions and relocate their data.

Colocation data centers essentially provide power, cooling, bandwidth security and hardware, including the building in which the servers are stored, for a rental fee.

Worldwide colocation market by metro

Synergy Research Group

Companies are looking for the most convenient methods of storage and management, and the colocation market is offering more accommodations in cost, scalability and security. And data centers are still necessary to keep the cloud afloat.

The whole cloud market, which includes public, private, and hybrid cloud offerings, is expected to hit about $554 billion by 2021. Because of continued transition to the cloud, companies' reliance on on-premise data centers is shrinking.

For some companies that are still in transition or maintaining a hybrid-cloud approach to data storage, turning to the colocation market is an obvious choice. But the stacking approach to hybrid cloud management is preferred and often pushes a company to complete cloud storage.