Contracted colo data center space now tops 3.7 million square meters

According to IHS, the amount of contracted colo data center floorspace was 10 percent higher in Q1 2015 than it was in Q1 2014, with 8.2-percent growth forecast through 2019.

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In its most recent tracking of the multi-tenant data center (MTDC) market, IHS tabulated the total amount of contracted floor space, worldwide, at 3.7 million square meters as of Q1 2015. That’s a 10-percent growth of the amount of contracted colo data center space in 2014’s Q1, IHS says, adding that the biggest share of space can be found in London, Tokyo, the New York Metro area, and Virginia. “Companies in these regions and across the globe continue to outsource their data center operations,” IHS said, “causing both wholesale and retail colocation businesses to grow at very healthy rates.”

In Q1, colo data center revenue also ticked up, although at half the rate of floor space. Q1’s 5-percent increase lags the floorspace increase “largely due to the weakening Euro versus the dollar,” IHS explains. The organization’s service that covers MTDC markets also tracks space and customer power consumption. In all, a CAGR forecast of 8.2-percent growth is expected through 2019 in constant dollars.

Liz Cruz, who tracks the MTDC market for IHS, commented, “The growth comes from the expectation that companies will continue to look for ways to reduce capital expenditures required to build and maintain company-owned data centers. Businesses are increasingly choosing to outsource the operations to MTDC providers, thereby moving these expenses into the operational column. Also, the ability to add data center space on demand is appealing to all companies whose IT needs grow at speeds much faster than new data centers can be built, which usually takes about two years.”

IHS adds that even with the optimistic outlook, risks do remain “in the form of overbuilding MTDC facilities, reminiscent of the dot-com era, and the commoditization of service offerings. Multi-tenant data centers are working to differentiate and add value by focusing more on managed service offerings and the opportunity for interconnection between tenants.”

You can find more information on IHS’s Multi-Tenant Data Center Intelligence Service here.

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