The Demand-Supply Equation for Wholesale and Colocation Data Centers in 2013

2013 has seen a shift in the demand supply equation for collocation and wholesale data centers. A report published by real estate firm Avison Young declared that 500,000 square feet of space has been leased by wholesale developers this year. This has led to the shrinking supply, with a simultaneous astonishing increase of demand. The demand is growing at a rate of 50 percent on a year on year basis. The state wide report reveals that the supply is only 8.3 Mega Watt of available space in Chicago, Illinois and up to 21 Mega Watt in Georgia, Atlanta.

The Demand-Supply Equation for Wholesale and Colocation Data Centers in 2013The super wholesale category has also seen increased demand with customers now looking to lease space in multiple markets. In 2012, there were only 53 providers that could cater to a 1 Mega Watt space and only 5 providers that could cater to a 6 Mega Watt capacity.

The differentiation between wholesale and collocation providers is also blurring. Many wholesale providers are now opening up to provide for smaller deals, while the reverse trend of collocation providers going for bigger deals is also happening. Market experts predicted a $25.72 billion market for collocation data centers and have indicated that the expected Compound Annual Growth Rate (CAGR) will be an incredible 11% from the year 2013 to 2018. The market is expected to reach a peak of $43.34 billion by 2018 with North America being the largest market globally. Collocation data centers have smaller capacity in terms of power and space, but the differential factor is the increased number of network and connectivity choices.

Pricing options also have changed in the last couple of years with both wholesale and collocation providers doing their best to work out the most efficient deals for their customers. For more input on wholesale and collocation data centers in the Midwest region, get in touch with us at today.

Alex Carroll

Alex Carroll

Managing Member at Lifeline Data Centers
Alex, co-owner, is responsible for all real estate, construction and mission critical facilities: hardened buildings, power systems, cooling systems, fire suppression, and environmentals. Alex also manages relationships with the telecommunications providers and has an extensive background in IT infrastructure support, database administration and software design and development. Alex architected Lifeline’s proprietary GRCA system and is hands-on every day in the data center.