Report: Chinese data center colo market to quadruple within 3 years
April 8, 2013
New study projects a quadrupling CAGR for the Chinese data center colocation market, up a whopping 380 percent, by 2016.
A new study from Datacenter Dynamicsforecasts China's data center colocation market to grow at a 40 percent compound annual growth rate (CAGR) over the next few years as companies there look to bypass Internet traffic bottlenecks experienced on traditional interconnection routes. The study projects the quadrupling of the colocation market's CAGR by a whopping 380 percent by 2016. By comparison, the country's overall data center market is only projected to reach a CAGR of 20 percent during the same time frame.
Hawkins Hua, author of the report, says that the inherent complexities involved in network interconnectivity in China has caused a sharp increase in Web traffic bottlenecks which, in turn, has led to increased use of colocation facilities by enterprises wishing to bypass traditional interconnection routes. "Although the market is still dominated by the state-owned telecom carriers, there is a growing market for carrier-neutral [colocation] providers who are proving popular with enterprises," Hua added.
State-owned telecom carriers dominate two-thirds of the data center colocation market in China. However, the report notes that more carrier-neutral service providers are entering the scene, albeit still reliant on the state-owned giants for space and network provision. New multinational companies are gaining a foothold in the market through strategic partnerships with local firms, the report adds. California-based Equinix, for example, entered China in 2010 by partnering system integrator Shanghai Data Solutions and using the Shanghai-based company's data center to provide services in the country, reveals the report.
