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Washington DC is the Hottest Growing Cloud Market PDF Print E-mail
Wednesday, 19 April 2017 08:09


New data from Synergy Research Group shows that the top ten metro areas accounted for 74% of US retail and wholesale colocation revenues in 2016, with New York and Washington DC alone accounting for 31%. The addition of Ashburn and Northern Virginia is the largest contributing factor to these statistics. In addition the new submarine fiber cables landing in Northern Virginia is another large contributor to this change.

Among these top metros Dallas and Washington have seen the strongest revenue growth rate over the last year, closely followed by Chicago. Dallas and Washington both grew at almost twice the rate of the national market. It is notable that the revenue growth rate in Chicago, Dallas and Washington all picked up strongly in 2016, while the growth rate in Silicon Valley actually cooled down. Across the ten metros Digital Realty is the leader in five, helped by its acquisition of Telx, while Equinix is the market leader in three. Other operators that feature strongly in the market share rankings for these metros include CyrusOne, DuPont Fabros, QTS, CenturyLink, Verizon, Coresite, SunGard, NTT, AT&T and Infomart.

John Dinsdale, a Chief Analyst and Research Director at Synergy, attributes the strong revenue growth to client requirements for localized data center facilities in metropolitan areas, as well as to an increase in cloud adoption.

“Colocation is an increasingly global market but also demands highly localized services focused on data center facilities close to clients in key economic hubs. This combination of global and local factors has been a major factor in driving the ongoing industry consolidation,” Dinsdale said.

“Another key feature in the market is the aggressive growth of cloud which has helped the US wholesale market to grow twice as rapidly as retail colocation.”

The research also shows that in Q4 the Washington DC metro (which includes parts of Northern Virginia) overtook New York to become the largest metro market for colocation in the world, though for the full year New York still maintained a narrow lead. They are closely followed by Tokyo and London. In addition to these four, the ranking of the top ten metros in the world for retail and wholesale colocation is rounded out by Silicon Valley, Shanghai, Dallas, Singapore, Frankfurt and Chicago.

“Colocation is an increasingly global market but also demands highly localized services focused on data center facilities close to clients in key economic hubs. This combination of global and local factors has been a major factor in driving the ongoing industry consolidation,” said John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group. “Another key feature in the market is the aggressive growth of cloud which has helped the US wholesale market to grow twice as rapidly as retail colocation.”

Synergy’s detailed colocation research is now supplemented by more in-depth coverage of 28 key metro markets.