Colo operators flock to emerging markets to build DCs
(2025/08/12)
- Reference: 1754992815
- News link: https://www.theregister.co.uk/2025/08/12/emerging_markets_now_the_growth/
- Source link:
Lagos, Warsaw and Dubai are among the fastest growing cities for colocation services - with metro areas in the Asia-Pacific and EMEA regions expanding more rapidly than traditional datacenter hotspots.
Enterprise AI adoption stalls as inferencing costs confound cloud customers [1]READ MORE
The latest data published by [2]Synergy Research ranks locations based on colocation revenues generated over the past four quarters, and finds that the top ten metropolitan markets currently account for 41 percent of business.
However, these mature regions expanded by an average of 8 percent over the last year, while the next 30 metropolitan markets managed to swell by an average of 12 percent and, for the following thirty, that figure reached 17 percent.
Taken together, those 60 second-tier markets account for roughly 39 percent of global colocation revenues. The upshot is that these area are not set to catch up with the current top ten in size any time soon, yet they represent a bigger focus for datacenter operators, says Synergy.
Northern Virginia, widely regarded as the [3]datacenter capital of the world for the sheer volume of bit barn capacity located there, leads the top ten, which includes the major economic hubs of Beijing, Shanghai, London, Tokyo, New York, Frankfurt, Singapore, Silicon Valley, and Chicago.
[4]
"Proximity to customers remains a key driver of the colocation market," said Synergy chief analyst John Dinsdale, "so datacenters tend to be located in metros that have a large concentration of companies and economic activity.
[5]
[6]
"Consequently, the markets in the top ten have not changed since Synergy published a similar analysis a year ago, though there has been some movement in the ranking, with Shanghai having leapfrogged London," he added.
In contrast, the fastest growing regions – those "tier 2" and "tier 3" metros – include cities such as Warsaw, Poland; Dubai in the UAE; and Lagos, Nigeria. They also include US sites such as Austin, San Antonio, and Quincy in Texas. Other rapidly expanding colocation areas are Johor and Kuala Lumpur in Malaysia; Johannesburg, South Africa; and Portland, Oregon.
[7]
"What is more interesting is the much higher growth rate of many emerging markets. While the top ten have grown by an average 8 percent, no less than 17 tier 2 metros have grown by 20 percent 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," Dinsdale said.
[8]Capacity planning a rising concern for datacenter operators as AI grows
[9]CoreWeave's $9B Core Scientific acquisition is a bid for more power
[10]Hyperscalers to eat 61% of global datacenter capacity by decade's end
[11]Alt cloud platform Railway forced to pause lowest tiers after onrush of GCP customers
Earlier this year, [12]The Register reported that the North American colocation market was struggling with unprecedented occupancy rates and difficulties in building new facilities, which might explain some of the growth in less-crowded regions.
Some traditional hotspots for colocation are facing barriers to further expansion due to availability of power issues, lack of suitable real estate, or pushback from local groups. That can lead to spillover into adjoining geographies, Dinsdale told us. "If you take somewhere like Malaysia (Johor and Kuala Lumpur), you see all three factors at play - relatively high economic growth, relatively low cost, and benefiting from neighboring Singapore's extreme restrictions on future datacenter growth."
Synergy's data covers over 300 colocation companies, with breakouts for 59 countries and 91 individual metropolitan markets. The firm says there is a strong local and national aspect to colocation, but, on a global basis, the biggest providers are Equinix, Digital Realty, NTT, China Telecom, CyrusOne, GDS, KDDI, and Chindata. ®
Get our [13]Tech Resources
[1] https://www.theregister.com/2025/06/13/cloud_costs_ai_inferencing/
[2] https://www.srgresearch.com/
[3] https://www.theregister.com/2024/08/15/hyperscale_capacity_global_research/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aJtlFgjFu5hWFzbG10mmoQAAAA0&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
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[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aJtlFgjFu5hWFzbG10mmoQAAAA0&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aJtlFgjFu5hWFzbG10mmoQAAAA0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2025/08/03/capacity_planning_concern_datacenter_ops/
[9] https://www.theregister.com/2025/07/07/coreweave_core_scientific_buy/
[10] https://www.theregister.com/2025/06/25/hyperscaler_datacenter_capacity/
[11] https://www.theregister.com/2025/06/16/railway_pauses_lowest_tiers/
[12] https://www.theregister.com/2025/03/19/datacenter_vacancy_record_low/
[13] https://whitepapers.theregister.com/
Enterprise AI adoption stalls as inferencing costs confound cloud customers [1]READ MORE
The latest data published by [2]Synergy Research ranks locations based on colocation revenues generated over the past four quarters, and finds that the top ten metropolitan markets currently account for 41 percent of business.
However, these mature regions expanded by an average of 8 percent over the last year, while the next 30 metropolitan markets managed to swell by an average of 12 percent and, for the following thirty, that figure reached 17 percent.
Taken together, those 60 second-tier markets account for roughly 39 percent of global colocation revenues. The upshot is that these area are not set to catch up with the current top ten in size any time soon, yet they represent a bigger focus for datacenter operators, says Synergy.
Northern Virginia, widely regarded as the [3]datacenter capital of the world for the sheer volume of bit barn capacity located there, leads the top ten, which includes the major economic hubs of Beijing, Shanghai, London, Tokyo, New York, Frankfurt, Singapore, Silicon Valley, and Chicago.
[4]
"Proximity to customers remains a key driver of the colocation market," said Synergy chief analyst John Dinsdale, "so datacenters tend to be located in metros that have a large concentration of companies and economic activity.
[5]
[6]
"Consequently, the markets in the top ten have not changed since Synergy published a similar analysis a year ago, though there has been some movement in the ranking, with Shanghai having leapfrogged London," he added.
In contrast, the fastest growing regions – those "tier 2" and "tier 3" metros – include cities such as Warsaw, Poland; Dubai in the UAE; and Lagos, Nigeria. They also include US sites such as Austin, San Antonio, and Quincy in Texas. Other rapidly expanding colocation areas are Johor and Kuala Lumpur in Malaysia; Johannesburg, South Africa; and Portland, Oregon.
[7]
"What is more interesting is the much higher growth rate of many emerging markets. While the top ten have grown by an average 8 percent, no less than 17 tier 2 metros have grown by 20 percent 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," Dinsdale said.
[8]Capacity planning a rising concern for datacenter operators as AI grows
[9]CoreWeave's $9B Core Scientific acquisition is a bid for more power
[10]Hyperscalers to eat 61% of global datacenter capacity by decade's end
[11]Alt cloud platform Railway forced to pause lowest tiers after onrush of GCP customers
Earlier this year, [12]The Register reported that the North American colocation market was struggling with unprecedented occupancy rates and difficulties in building new facilities, which might explain some of the growth in less-crowded regions.
Some traditional hotspots for colocation are facing barriers to further expansion due to availability of power issues, lack of suitable real estate, or pushback from local groups. That can lead to spillover into adjoining geographies, Dinsdale told us. "If you take somewhere like Malaysia (Johor and Kuala Lumpur), you see all three factors at play - relatively high economic growth, relatively low cost, and benefiting from neighboring Singapore's extreme restrictions on future datacenter growth."
Synergy's data covers over 300 colocation companies, with breakouts for 59 countries and 91 individual metropolitan markets. The firm says there is a strong local and national aspect to colocation, but, on a global basis, the biggest providers are Equinix, Digital Realty, NTT, China Telecom, CyrusOne, GDS, KDDI, and Chindata. ®
Get our [13]Tech Resources
[1] https://www.theregister.com/2025/06/13/cloud_costs_ai_inferencing/
[2] https://www.srgresearch.com/
[3] https://www.theregister.com/2024/08/15/hyperscale_capacity_global_research/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aJtlFgjFu5hWFzbG10mmoQAAAA0&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aJtlFgjFu5hWFzbG10mmoQAAAA0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aJtlFgjFu5hWFzbG10mmoQAAAA0&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aJtlFgjFu5hWFzbG10mmoQAAAA0&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2025/08/03/capacity_planning_concern_datacenter_ops/
[9] https://www.theregister.com/2025/07/07/coreweave_core_scientific_buy/
[10] https://www.theregister.com/2025/06/25/hyperscaler_datacenter_capacity/
[11] https://www.theregister.com/2025/06/16/railway_pauses_lowest_tiers/
[12] https://www.theregister.com/2025/03/19/datacenter_vacancy_record_low/
[13] https://whitepapers.theregister.com/
Eh?
frankvw
South African resident here... I may be missing something, but I would definitely have considered Jo'burg as top spot for a DC, what with the unreliable and limited energy and water supply, and the city being a terrible crime hotspot plagued by thoroughly corrupt and incompetent governance. But that's just me.
"Earlier this year, The Register reported that the North American colocation market was struggling with unprecedented occupancy rates and difficulties in building new facilities, which might explain some of the growth in less-crowded regions."
And then there's imported duty on what they need to kit them out. Isn't North Virginia within easy foot-shooting range of Washington?