COLOCATION
How things currently stand for UK colocation The State of the Market By Tim Anker, Founder and Director, The Colocation Exchange
Today, there is both demand and supply. If we compare the current market with that in 2007, when the market was defi nitely short of supply, then I think today’s market can best be described as very healthy. There is a premium market located
Tim Anker considers supply and demand.
in central London where colocation providers such as Telehouse and Telecity dominate the supply. Demand in this market remains robust despite some of the highest colocation prices in Europe, but the prices are worth paying if you need to connect with other networks and carriers. Expect to pay up to £650 per kW per month including power used.
Central London The central London market remains very active for mostly wholesale customers (carriers and ISPs) seeking points of presence to house their switching equipment. They are usually looking for part racks up to a few racks and not that power hungry. Demand will always remain strong in the Docklands, which is a unique and as yet unrivalled connectivity hub in both the UK and Europe.
Elsewhere Away from the central London market facilities, despite the wide geographic
spread, are much more similar to each other than they are to those highly connected sites in central London. Carriers per site range from two or three to 15 in the larger sites. This compares with over 50 in the Docklands based sites. Specifi cations are also markedly similar; pretty much everyone claims to be offering Tier3 standard space but there are marked differences in pricing, with the large pan-European operators suggesting premium prices whereas supposedly similar quality space is available at up to half their pricing. The demand side in this market is
much more varied. There is some retail business, one or two racks, mostly from clients that want both the convenience of a good quality facility near to them and without the hassle of having to go into central London or alternatively you have central London clients seeking a diverse location to their primary sites in town. This market is also able to accommodate much larger customers, taking anything from a few hundred kilowatts up to a MegaWatt or beyond, though the larger customers tend to deal direct with the specialist wholesale operators. Most systems integrators will fall into this category and many corporate customers including banks, pharmaceutical and hosting companies.
It is interesting to note that as a result, customer numbers per facility are much lower in this market than in central London, suggesting that capacity is sold in larger amounts to fewer customers. If there has been one key new trend
this year, it has been the emergence of direct corporate demand. Corporate clients are realising their in-house data centre is either no longer fi t for purpose or simply too ineffi cient to maintain. All are asking not only about colocation but also other services, for instance virtualisation or cloud based solutions. To sum up, demand is indeed
healthy, but so is the supply pipeline. Talk of further capacity crises is simply misplaced. Demand remains robust for central London despite high prices. In the market around London, signifi cant choice and a wide range of prices exist for pretty similar facilities, yet all operators seem to be making rapid progress with new entrants appearing all the time. And fi nally in the regional UK market nascent demand is at last emerging. All in all, a very healthy picture.
London boasts some of the highest colocation prices in Europe. 46 NETCOMMS europe Volume II Issue 3 2012
www.netcommseurope.com
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