Colocation growth from Salt Lake to Singapore

March 17, 2015

The colocation market continues to grow at a steady pace as enterprises from a variety of sectors expand their data center capacity. The emergence of cloud computing has increased the global dependence on the storage of digital information, and colocation is seen as a solid option for businesses with monetary constraints.

The vast majority of colocation providers offer a secure, high-performance network that can be easily scaled depending on business demands. A colocation client can rent one cage in a server rack, an entire server cabinet or a massive rack of up to thousands of square feet.

Meanwhile, a recent spate of investments has strengthened the global market for colocation solutions. In the U.S. and Asia, business leaders are getting the most out of their data center budgets.

A major investment in North American colocation
Shaw Communications Inc. recently announced that it will acquire Denver-based ViaWest, Inc., a provider of colocation services, from Oak Hill Capital Partners for approximately $1.2 billion.

ViaWest recorded a 15 percent compound annual growth rate between 2010 and 2013 and has 1,300 customers in seven states. About 70 percent of ViaWest storage capacity is currently in use at its eight facilities in Denver, Salt Lake City, Minneapolis, Phoenix, Las Vegas, Dallas, Austin, Texas, and Portland, Oregon.

“We identified the data center sector as an attractive opportunity adjacent to our core business and with the acquisition of ViaWest, Shaw gains significant capabilities, scale and immediate expertise in the growing marketplace for enterprise data center services,” said Brad Shaw, chief executive officer for Shaw Communications Inc.

Fueling colocation in major Asian markets
Green Data Center News reported that Colt Group, a colocation business based in the United Kingdom, will purchase KVH, a Japanese colocation service, for $162 million.

Colt hopes to expand its colocation business in KVH’s primary markets: Tokyo, Seoul, South Korea, Singapore and Hong Kong. The Asia Pacific IT services market is increasing at an annual rate of 12 percent, the news outlet noted.

“The acquisition puts Colt in a position to address the emerging strategic interest of global data center providers to establish footprints within core connectivity hubs in Asia,” Jabez Tan, a senior data center analyst with Structure Research, told the news outlet. “KVH enables Colt to serve both existing customers and address new opportunities in Asia, providing a platform for Colt from which it can build upon to make the shift into a fragmented Asian market.”