Equinix, Savvis hold dominant spots in U.S. colocation market

Equinix (Nasdaq: EQIX) and CenturyLink's (NYSE: CTL) Savvis subsidiary have become the two dominant U.S. colocation providers, according to a new Synergy Research Group report.

These two providers continue to see positive colocation and managed service earnings results.

In Q3 2013, Equinix's recurring revenues, which consist of colocation, interconnection and managed services, were $517 million, up 3 percent sequentially. Likewise, CenturyLink reported that Savvis' colocation revenues rose 1.4 percent year-over-year to $146 million, while managed hosting revenues rose 15 percent year-over-year to $129 million.

At the same time, Equinix and Savvis continued to enhance their offerings and reach throughout 2013.

Synergy Research retail colocation market leaders

Equinix opened eight new Solution Validation Centers, which provide a demonstration and proof-of-concept testing environment for new and existing customers to measure the performance of application platforms, in key markets U.S. markets such as Ashburn (Washington, D.C., metro), Miami, New York, and Silicon Valley.

Savvis' parent CenturyLink acquired Seattle-based Tier 3 to enhance cloud app development and launched its big data service suite for enterprises, government agencies.

Not far behind Equinix and Savvis were SunGard, AT&T (NYSE: T) and Verizon (NYSE: VZ), all of which held a 5 percent stake of the colocation market.

But retail colocation is only one part of the market picture. Digital Realty Trust and DuPont Fabros are driving the burgeoning wholesale market. Wholesale colocation revenues, reports Synergy, rose to $700 million in 2013.

A big factor in driving new colocation growth will be the continued adoption of cloud services.

"Looking ahead, the adoption of cloud infrastructure services will act as a damper on some aspects of the colocation market, while stimulating others," said John Dinsdale, chief analyst and research director at Synergy. "We forecast that U.S. colocation revenues will grow by a CAGR of 7 percent over the next five years."

For more:
- see the release

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