Summary of Main Findings - Summary of Main Findings Pricing Individual Pricing Components ¢â‚¬¢ Median
Summary of Main Findings - Summary of Main Findings Pricing Individual Pricing Components ¢â‚¬¢ Median
Summary of Main Findings - Summary of Main Findings Pricing Individual Pricing Components ¢â‚¬¢ Median
Summary of Main Findings - Summary of Main Findings Pricing Individual Pricing Components ¢â‚¬¢ Median
Summary of Main Findings - Summary of Main Findings Pricing Individual Pricing Components ¢â‚¬¢ Median

Summary of Main Findings - Summary of Main Findings Pricing Individual Pricing Components ¢â‚¬¢ Median

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  • SUMMARY OF FINDINGS TeleGeography Colocation Research

  • Summary of Main Findings Pricing

    Individual Pricing Components

    • Median baseline prices (median price per kilowatt for a 4-kilowatt cabinet) are consistently higher in European metro markets than in North America. The median price for North American markets is $275, while the European median is 31 percent higher at $360.

    • Relative median high-density colocation rates (price per kilowatt for 10 kilowatt cabinets) vary compared to prices per kilowatt for standard 4-kilowatt cabinets but average 8 percent lower than the standard rate. Whether high-density space is provided at premium or discounted rates is a function of relative scarcity between power and space.

    • Large-scale retail colocation leases are consistently discounted relative to single-cabinet leases, at rates averaging 16 percent lower than standard rentals.

    • The gulf between cross-connect rates in Europe and North America has not narrowed. North America’s median fiber cross connect price of $300 is still nearly five times the European median rate.

    • Operators in North America generally charge more for fiber cross-connects than for Ethernet, whereas European operators typically charge more for Ethernet cross-connects.

    Total Cost Model

    • When assuming one cross-connect, total cost for colocation is quite similar between North America and Europe. Hong Kong, London, and New York were among the most expensive markets covered in the survey, with an average TCO of $1,865 to $2,500 per month.

    • When five cross-connects are assumed, the total cost for colocation in North America is dramatically higher than in Europe, averaging $2,690, compared to $2,060 per month. In this model, cross-connects account for nearly 55 percent of the Total Cost of Ownership (TCO) in North American markets and just 22 percent of TCO in Europe. In competitive markets such as Amsterdam, average TCO was less than $1,800.

    Trends and Expectations

    • While historical baseline prices fluctuate by metro more than by region, historical cross-connect rates show persistent regional trends. Median rates in key U.S. markets have remained at $300

    COLOCATION DATABASE SUMMARY OF MAIN FINDINGS

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  • over the past year. European rates have dropped back to historic median prices ranging in a narrow band between $55 and $65.

    • Across global markets, median near-term price change expectations are flat or lean towards modest price erosion.

    Capacity and Providers

    Metro Capacity

    • The international hubs of New York and London are estimated to be the world’s biggest retail colocation markets, each with at least 7 million square feet of gross data center space.

    • A number of sizable regional markets have cropped up around the globe in recent years. Critical secondary markets with at least 1 million square feet of retail colocation space include Madrid and Moscow in Europe; Toronto, Boston, and Seattle in North America (among others); and Sydney and Mumbai in the Asia-Pacific.

    High-Growth Markets

    • Many of the fastest-growing markets like Stockholm and Phoenix started from small base levels of capacity, though these two markets in particular have quickly risen to the status of key subregional markets. Major hubs with healthy growth rates include Toronto, Hong Kong, and Sydney.

    Vacancy

    • Across the metro areas represented in TeleGeography’s latest colocation survey, operators indicate average vacancy levels of around 33 percent. Among hub markets with sufficient data to report, Chicago exhibits relatively low excess colocation inventory, with 21 percent vacancy. Conversely, vacancy rates almost reach 45 percent in New York.

    Providers

    • Equinix’s acquisition of TelecityGroup gives the company nearly as much capacity in Europe as it has in North America. In North America at least ten operators each control more than 1 million square feet of colocation space.

    • In the last two years, Equinix has added almost two times the amount of data center capacity in the Asia-Pacific that it has added in North America, with new sites coming online in Sydney, Melbourne, Singapore, and Tokyo. While Telehouse’s launch of North Two in London added more than 260,000 square feet to its European footprint, it also launched sizable new facilities in Osaka and Tokyo.

    Proprietary Data Centers

    • Among the proprietary data center operators tracked in the Colocation Database, all are rapidly expanding into new markets. Apple has plans to launch massive new campuses in Arizona, Ireland, and Denmark over the next few years, as well as expanding in Oregon. AWS is adding regional availability in North America, China, and the UK. Facebook is concentrating new development in the U.S. and Europe, and Microsoft is adding data centers across core European markets. Google is planning new data centers for Alabama and the Netherlands, and is rapidly expanding its Google Cloud availability to key nodes worldwide.

    COLOCATION DATABASE SUMMARY OF MAIN FINDINGS

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  • Connectivity

    • Level 3 and Verizon are the most prominent carriers offering connectivity at retail colocation sites, with ubiquitous site presence in North America. AT&T and Zayo are also commonly present in North American facilities, while Cogent, TeliaSonera, and BT are heavily represented in European data centers.

    COLOCATION DATABASE SUMMARY OF MAIN FINDINGS

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  • The content on the preceding pages is a section from TeleGeography's Colocation Database

    The work is based on sources believed to be reliable, but the publisher does not warrant the accuracy or completeness of any information for any purpose and is not responsible for any errors or omissions.

    This work is for the confidential use of subscribers. Neither the whole nor any part of this publication may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopied, recorded or otherwise, without prior written consent from PriMetrica, Inc.

    All rights reserved. © 2016 PriMetrica, Inc.

    TeleGeography

    A Division of PriMetrica, Inc.

    Washington, D.C. / San Diego / Exeter

    U.S. tel: +1 202 741 0020 / U.K. tel: +44 1392 315567.

    www.telegeography.com

    COLOCATION DATABASE SUMMARY OF MAIN FINDINGS

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    Summary of Main Findings Pricing Individual Pricing Components Total Cost Model Trends and Expectations

    Capacity and Providers Metro Capacity High-Growth Markets Vacancy Providers Proprietary Data Centers Connectivity