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Three Colocation Pricing Facts Every Networker Should Know

Colocation

By Jon HjemboJul 31, 2017

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We dug into the latest summary of key findings from our innovative Colocation Database to extract three pricing facts we think any colo expert should have on their radar. Here's what we've got.

Median baseline prices are consistently higher in European metro markets than in North America.

The median price for North American markets is $275, while the European median is 31 percent higher at $360.

Relative median high-density colocation rates (price per kilowatt for 10 kilowatt cabinets) vary compared to prices per kilowatt for standard 4-kilowatt cabinets but average 8 percent lower than the standard rate. Whether high-density space is provided at premium or discounted rates is a function of relative scarcity between power and space.

Large-scale retail colocation leases are consistently discounted relative to single-cabinet leases, at rates averaging 16 percent lower than standard rentals.

North America’s median fiber cross connect price of $300 is still nearly five times the European median rate.

The gulf between cross-connect rates in Europe and North America has not narrowed. 

Operators in North America generally charge more for fiber cross-connects than for Ethernet, whereas European operators typically charge more for Ethernet cross-connects.

But, when assuming one cross-connect, total cost for colocation is quite similar between North America and Europe.

Hong Kong, London, and New York were among the most expensive markets covered in the survey, with an average total cost of ownership (TCO) of $1,865 to $2,500 per month.

However, when five cross-connects are assumed, the total cost for colocation in North America is dramatically higher than in Europe, averaging $2,690, compared to $2,060 per month.

In this model, cross-connects account for nearly 55 percent of the TCO in North American markets and just 22 percent of TCO in Europe. In competitive markets such as Amsterdam, average TCO was less than $1,800

 

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Jon Hjembo

Jon Hjembo

Jon is a Senior Analyst at TeleGeography. In addition to serving as managing editor for TeleGeography's wholesale telecom network infrastructure research, Jon is our lead colocation analyst.

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