2014 US Colocation Market: Mature, Competitive, Expanding
Over the last decade, the colocation market has expanded and flourished – with more customers looking to outsource new facilities and more vendors emerging and expanding to meet this demand.
Colocation providers now offer a myriad of services beyond the expected physical space. Infrastructure is now table stakes, including enhanced power efficiency and physical security. The more impressive solutions offer a full portfolio of managed services to cloud, or host and steward a marketplace of third party services, offering close proximity to business partners and primary communications services. By “close” we mean VERY close, as in the same building, sometimes only meters away. Depending on the use case, proximity like this can make the difference between success or failure of a business function – financial trading is an obvious example but there are many more.
To get better acquainted with this ever expanding landscape of vendors and solutions, about this time last year I began a lengthy exercise to investigate and analyze the US colocation market. After three months, I identified 430 organizations through search engines and public profile sites. I then weeded out 112 firms that had inactive websites, were acquired, or did not clearly provide retail or wholesale colocation. Over the subsequent 3 months, I attempted to quantify the footprint of all qualifying facilities. Some key findings from this research include:
- There are over 1430 data center facilities in more than 330 cities across the US, but 53% of vendors surveyed operated only 1 facility.
- There is over 68 million square feet of reported data center space, and an estimated 90-120 million square feet in total. This projection includes a fair amount of assumptions as many vendors did not provide facility sizes.
- A few large players dominate the overall market. 5% of the vendors operated over 50% of the total facilities reviewed.
- While the majority of vendors contained operations within one region, 20% of vendors have multi-regional presence (located in three or more states), and 11% have facilities outside of the US – for organizations looking to supporting global customers.
One general observation is how we are truly in the information age. While I actively surveyed and briefed 22 vendors for this project, over 90% of the information gathered was available online and through public resources! For example, below I've included a graphic of the energy profiles by state, courtesy of the US Energy Information Administration:
What does this mean for vendors? If all of your competitors are providing transparency and detail about their facilities, your potential customers may be suspicious if you choose to hide that information.
So far I have produced two reports from this research, aimed to help customers as well as vendors understand the macro trends surrounding this market. They are:
- Consider Colocation As A Key To Your Holistic Data Center Strategy: This report provides an overview of the retail colocation market, and is positioned to educate organizations on how these solutions can benefit their business.
- Strategically Locate Your Next Data Center: This report presents evaluation criteria for physical site selection, and layers that on top of the available data center space across the country.
More is on the way! Next, I plan to investigate the emerging trends at the top 10% of the market and how they are innovating across the data center industry.
In the meantime, I invite you to check out the detailed research reports on this subject and let’s discuss. I look forward to some interesting dialog about the colocation market and how it helps you pursue a BT agenda that helps your business win, retain, and serve customers!