Data-center providers that run warehouselike buildings where companies can base their computer operations are holding their own during the pandemic, industry analysts say.
Between January and June, U.S. businesses paid for nearly 135 megawatts of power in the country’s largest data-center-operator markets, a modest decline from a record for the same period last year, according to commercial real-estate services firm
CBRE Group Inc.
The industry, an important part of the enterprise technology market, has been relatively resilient during the economic disruption caused by the pandemic, CBRE says.
Known as colocators, the facilities offer a global network of data centers—a boon to companies with limited access to their own in-house servers. The network also connects the companies to cloud providers, which have seen a surge in demand as businesses shifted to remote-work capabilities.
“The bulk of the activity we saw at the wholesale colocation level were hyperscalers, cloud companies and content providers taking up colocation space just to meet this increase in demand,” said Pat Lynch, senior managing director of CBRE’s data-center division.
Cloud services providers rent computer capacity and software tools on an as-needed basis from their own data centers.
As companies shifted more of their systems to the cloud, colocators handled the extra load, said John Dinsdale, chief analyst and research director at market research firm Synergy Research Group.
Synergy says a large percentage of cloud services run in colocation facilities.
As of July, there were 541 so-called hyperscale data-center facilities with tenants including
’s Azure cloud service, Google Cloud and others, more than double the number five years ago, according to Synergy.
one of the world’s biggest data-center landlords, closed a $3.6 billion deal two years ago to purchase 24 data-center sites from
Verizon Communications Inc.
Other key players include
Digital Realty Trust Inc.,
Iron Mountain Inc.
Synergy puts total revenue in the global colocation market in the first quarter at $9.5 billion, with revenue from large cloud providers growing 22% from the year-earlier period.
“The wider picture shows a market that is in rude good health,” Mr. Dinsdale said.
Bob Gill, a research vice president at technology research firm Gartner Inc., said colocation facilities also continue to provide a crucial service for enterprise IT.
“Not everything is optimally served in the cloud,” Mr. Gill said. Colocation is increasingly seen as a strategic networking option, or a distributed infrastructure option, and not just an alternative place to park IT gear, he said.
International Data Corp. estimates the global colocation market will grow 8% in 2020, on a year-to-year basis.
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