While a handful of major metropolitan areas continue to dominate the colocation market, new data from Synergy Research Group indicates that tier two metro markets are increasingly driving growth and reshaping the industry landscape.
According to Synergy's latest analysis, just ten metros account for 41% of the world’s current colocation market, with Northern Virginia leading the pack at 7%. Beijing, Shanghai, and London each hold around 5%, followed by Tokyo and New York at approximately 4% each. However, it's the next tier of metros that are exhibiting the most dynamic growth.
While the top ten markets grew by an average of 8% in the last year, the next thirty grew by an average of 12%, and the subsequent thirty grew by an impressive 17%. These sixty metros now represent 39% of the global market.
Among the fastest-growing markets ranked 11-40 are Johor, Johannesburg, Kuala Lumpur, Portland, Jakarta, and Mumbai. The growth leaders in the 41-70 range include Austin, Lagos, Quincy, San Antonio, Warsaw, and Dubai.
This trend highlights the increasing importance of proximity to customers and the decentralisation of data infrastructure. As businesses expand their digital footprint and seek to improve latency and performance, they are increasingly turning to colocation facilities in tier two markets.
John Dinsdale, a chief analyst at Synergy Research Group, notes, "Proximity to customers remains a key driver of the colocation market, so data centres tend to be located in metros that have a large concentration of companies and economic activity."
He adds, "What is more interesting is the much higher growth rate of many emerging markets. While the top ten have grown by an average 8%, no less than 17 tier two metros have grown by 20% or more. This is a clear indication of how the market will evolve over the coming years with rapidly developing markets becoming ever more important."
The rise of tier two metro markets presents significant opportunities for colocation providers. By expanding their presence in these areas, they can tap into new sources of demand and cater to the evolving needs of businesses seeking reliable and scalable data centre solutions.
