The Colocation Sector - TeleGeography · 2017. 10. 6. · The Colocation Sector Shifting Dynamics...


Outline •  Network and Colocation Growth •  Mergers and Divestments •  Pricing Movements


Network and Colocation Growth


Major Interconnection Hubs


International Internet Bandwidth, 2012 (Tbps)


Mixed growth rates in secondary hubs Growth in International Internet Bandwidth, CAGR 2012-2016


Content positions for localized growth



Local peering is global

Source: TeleGeography’s Internet Exchange Map, www.internetexchangemap.com


Tremendous capacity in core markets Retail Colocation Floor Space, Core Markets, 2016


…with moderate but steady growth Growth in Retail Colocation Space, Core Markets, CAGR 2012-2016


Secondary markets establishing a foothold Retail Colocation Floor Space, Secondary Markets, 2016


…while showing signs of maturation Growth in Retail Colocation Space, Secondary Markets, CAGR 2012-2016


Mergers and Divestments


Equinix alters the competitive landscape •  First Bit Isle (Dec 2015) •  TelecityGroup (Jan 2016) •  And now Verizon (pending approval)


Equinix has been busy Equinix Capacity by Market before Mergers, thousands of sq. ft.


Equinix has been busy Equinix Capacity by Market after Mergers, thousands of sq. ft.


Are carriers getting out of colo?

These regions now Equinix

Now TierPoint


Pricing Movements


Consistent regional differences in base price Median Monthly Price per Kilowatt at 4-Kilowatt Density, H2 2016


Some markets more predictable than others Range in Monthly Price per Kilowatt at 4-Kilowatt Density, H2 2016


U.S. XCs still far pricier than European ones Median Monthly Fiber Cross-Connect Price, H2 2016


…as they have been for a while Change in Median Monthly Fiber Cross-Connect Prices, H1 2015-H2 2016


…but lots of variance within markets Range in Monthly Fiber Cross-Connect Price, H2 2016


Similar TCO, despite varying component costs Total Cost of Ownership per Month, One Cross-Connect, H2 2016


…but with more XCs, differences amplify Total Cost of Ownership per Month, Five Cross-Connects, H2 2016


Prices likely won’t budge much Operator Near-Term Price Change Expectations by Metro Area, H2 2016


Conclusion •  Network and colocation growth mixed but

generally robust

•  M&As in past year confirm focus on both primary and secondary markets

•  Pricing is stable across major colo markets


Jon Hjembo Senior Analyst TeleGeography

[email protected] +1 202 741 0046

The Colocation Sector - TeleGeography · 2017. 10. 6. · The Colocation Sector Shifting Dynamics...

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