China, Singapore, D.C. Metro to drive colocation data center market to near-10% growth

April 13, 2017
In its multitenant data center market tracker, IHS Market points out that far more than half of the world’s internet traffic travels through Data Center Alley, a.k.a. Ashburn, VA.

In the latest edition of the IHS Markit Multi-Tenant Data Center Market Tracker, the research organization says the colocation data center market will grow by nearly 10 percent in 2017. Reporting some general findings of this most-recent tracker, Elizabeth Cruz—IHS Markit’s associate director for data centers, cloud and IT infrastructure—pointed out, “Wholesale and retail colocation data center revenues crossed over the $20-billion mark in 2016 and the current year is already showing promise.

“Highest rates of growth will come from regions of Asia, as has been the case for a few years,” Cruz continued. “China’s colocation market is projected to grow nearly 14 percent over the next five years dominated largely by the big state-owned telecommunication providers China Telecom and China Unicom. Singapore also has double-digit growth projections for the forecast period, as it continues to be a major access point into the rapidly developing Southeast Asian markets of India, Thailand, Malaysia, Indonesia and the Philippines.”

Cruz described Ashburn, VA as a “big market that just keeps getting bigger,” pointing out that the municipality known as Data Center Alley “already has well over half of the world’s internet traffic traveling through it.” IHS Markit projects Ashburn’s five-year compound annual growth rate will be 13 percent. “Ashburn has a rich fiber network, data center-friendly tax breaks, and relatively low property costs, while also being able to provide low-latency connection to the major public and private enterprises in the Washington D.C. area,” the analyst added.

The orange line in the graph on this page indicates year-on-year growth over the period 2013-2020. The noticeable dip in 2015 largely was due to the weakening of the euro against the U.S. dollar, IHS Markit noted. The firm said it “fully expects the focus of colocation providers on direct connectivity with major cloud providers to further drive adoption of colocation over the next five years—helping to underpin a projected 8-percent five-year compound annual growth rate for total market revenues.”

You can find out more about IHS Markit’s Multi-Tenant Data Centers Intelligence Service here.

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