Just 30 Metros Account for 68% of the Worldwide Colocation Market

RENO, NV, June 24, 2022

New data from Synergy Research Group shows that just 30 metro areas account for 68% of worldwide retail and wholesale colocation revenues. Ranked by revenue generated in Q2 2021, the top five metros are Washington DC/Northern Virginia, Shanghai, Beijing, Tokyo and London, which in aggregate account for 26% of the worldwide market. In the past year Beijing has replaced New York in the top five while Tokyo has slipped down the ranking. Among the five, Beijing and Shanghai had by far the highest growth rates. The next 25 largest metro markets account for another 42% of the market. These top 30 metros include 14 in North America, ten in the APAC region, five in EMEA and one in Latin America. The world’s three largest colocation providers are Equinix, Digital Realty and NTT. One of those three is the market leader in 20 of the top 30 metros. The global footprint of Equinix is particularly notable and it is the retail colocation leader in 18 of the top 30 metros. In the wholesale segment Digital Realty is leader in ten of the metros, with NTT or Global Switch and leading in seven more. Other colocation operators that feature heavily in the top 30 metros include @Tokyo, China Telecom, China Unicom, Chindata, CoreSite, Flexential, GDS, Iron Mountain, NEXTDC, QTS and Switch. Over the last thirty quarters, the top 30 metro share of the worldwide colocation market has remained at around the 66-68% mark. While the major metros are a natural magnet for data center investment due to their status as economic hubs, there has also been a push to build out more edge locations. These two opposing trends have kept the major metro share of the total market relatively constant. Among the top 30 metros, those with the highest colocation growth rates (measured in local currencies) are Portland, Beijing, Mumbai, Seoul, Shanghai, Sao Paulo and Osaka, all of which grew by over 15% in the last year. While APAC metros featured heavily in this growth ranking, in the US the major metros with the highest growth rates were Portland, Phoenix, Washington DC/Northern Virginia and Silicon Valley. In EMEA Frankfurt and Dublin topped the list. Outside of the top 30, metros with particularly high growth rates include Richmond, Salt Lake City, Montreal and Milan.

“While we continue to see strong demand for colocation across the board, the standout regional growth numbers are coming from APAC and the highest growth sector is wholesale data center leasing for hyperscale operators,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “Across the top 30 metros, spending on retail colocation is almost twice as much as wholesale, but wholesale growth rates are more than double retail growth rates, reflecting the different market dynamics for the two segments. Due to different location criteria for hyperscalers, there are some metros where wholesale market size is bigger than retail, notable examples being Washington DC/Northern Virginia, Phoenix, Montreal and Portland.”