Equinix and Digital Realty dominate the colocation market with the progression of their respective acquisitions and mergers.
Equinix has recently finished the acquisition of 29 data centres from Verizon, while Digital Realty plans on merging with DuPont Fabros. The two M&A deals are focused on the US and will increase revenues for both Equinix and Digital Realty in that market. With the merged Digital Realty/DuPont Fabros set to maintain a narrow lead over Equinix/Verizon in the US.
“There has been a lot of consolidation in the data centre industry already in 2017, but these two deals stand out. Equinix and Digital Realty were already growing much more rapidly than the overall market, and these deals will help them to further distance themselves from the competition,” said John Dinsdale, a chief analyst and research director at Synergy Research Group.
According to a report by Synergy Research Group, Equinix and Digital Realty are both market leaders in the colocation market, accounting for 11% and 7% of worldwide Q1 revenues respectively. The reports indicates that had the M&A deals happened at the beginning of the year, their Q1 market share would be in the region of 13% for Equinix and 9% Digital Realty.
Just behind them are NTT with a 6% market share, KDDI/Telehouse with 3% and a 2% share belonging to: China Telecom, CenturyLink (now Cyxtera), CyrusOne, Global Switch and Interxion.
Across the two major market segments of retail colocation and wholesale, Equinix/Verizon would have had a 17% share of retail colocation, while Digital Realty/DuPont Fabros would have had a 31% share of the smaller wholesale segment.
Regionally the Q1 data shows that the market continues to expand steadily with APAC having the highest growth rate, the highest in area being: China, Hong Kong, Japan and Australia. Equinix is the major leader in EMEA, ranked second in North America and third in APAC. Digital Realty is the leader in North America and NTT the leader in APAC.
“The aggressive growth of hyperscale data centre operators and other cloud and hosting companies is helping to drive demand for data centre footprint across all regions, while many enterprise customers require their data centre operators to span multiple metros and countries”. “These fundamental market drivers mean that colocation is increasingly a market where scale and geographic scope determines success,” added Dinsdale.
