The data centre colocation market continues to move forward on a global basis and is estimated to be worth $33.59b in 2016 and projected to grow at a rate of 15.2% in 2017. This is going to be consistent and sustainable growth. On a five-year CAGR basis (2015-2020), the global colocation sector is projected to grow 15.7%.

Retail colocation represents 75% of that total and this market is estimated to be worth $25.27b in 2016 with a projected growth rate of 14.3% in 2017. Wholesale colocation takes up the remaining 25% and is estimated to be worth $8.31b in 2016 with a growth rate of 17.9% projected for 2017.

The differing growth rates between retail and wholesale colocation reflect one of the main overarching trends in the sector: the gradually expanding market share occupied by wholesale colocation and the slowing in retail colocation growth. There are a number of drivers at work, but the big one is the role of massive-scale public cloud. As more workloads move to cloud, there is less addressable market for retail colocation and even some cannibalization. Meanwhile, the public clouds that are absorbing the data and workloads still need to run in data centres and those facilities are increasingly being sourced to providers able to accommodate multi-MW footprints.

Public cloud is also at the centre of the other major change underway in the sector: the shift from a focus on carrier neutrality to a landscape defined by cloud neutrality. The first phase of the sector’s growth (2005-15) was defined by the drive to achieve network neutrality and then density. The next phase is being defined by the drive to achieve density and neutrality with cloud infrastructure services. Few have done this at scale and this defines the current trajectory of the competitive landscape.

None of this is to say that retail colocation is fading or in danger of declining. This is a healthy market that continues to be on a positive growth trajectory. But it is important to be aware of the transformative currents in motion that are changing the profile of the sector. There are differences in the pace and form in how this is playing out in different geographies, but the overall directional trends are firmly in place and the numbers bear this out.

This report measures and projects the size and growth trajectory of the colocation market on a global and regional basis. The market is measured in aggregate and split between retail and wholesale colocation – an increasingly important distinction. This report is an excellent resource for any service provider, investor or end user looking to understand and project the global colocation market or find a service provider.