circuit-board-g6a730060f_1280

Data Centers and Digital Transformation

By Jayne MillerMar 8, 2022

Share

When it comes to the cloud and digital transformation of the enterprise, it's always useful to come back to the fact that physical geography matters to our digital world.

Moving the data center off-premises or shifting data and workloads to the cloud doesn’t dematerialize this fact. You still need wires to connect to servers in a rack at a hyperscaler or neutral data center facility.

More than ever, enterprises need to understand the market landscape and pricing structure at what were once “colocation” facilities. (Which were once only interesting to service providers and ISPs.) 

Greg welcomes TeleGeography's resident interconnection expert, Jon Hjembo, to help us navigate the world of data center operators and pricing.

Subscribe to access all of our episodes:
Apple | Google | Spotify | Stitcher | TuneIn | Podbean | RSS

Key Takeaways

The data center market has transitioned, moving toward a carrier-neutral model.

Historically, collocation sites were often controlled by carriers and primarily served service providers and ISPs.

However, companies like Equinix introduced the carrier-neutral model. This shift was followed by a "massive divestiture" of data center assets, leading to new operators acquiring these assets and operating under a carrier-neutral approach.

Data center development is concentrated in major hubs, but there's growing interest in "frontier markets." 

Key established markets include FLAP (Frankfurt, London, Amsterdam, Paris) in Europe, Singapore and Hong Kong in Asia (though facing some issues), and US locations like Silicon Valley, LA, Chicago, Dallas, New York, and Ashburn.

While there's "tremendous buildup" in these core hubs, major international investment is increasingly targeting markets that are less mature. This expansion into "frontier markets," such as India, mainland China, Southeast Asia, Latin America, the Middle East, and Africa, is driven by saturation in mature markets and the need to push cloud and content closer to large local populations to reduce latency for bandwidth-intensive applications.

Greg Bryan

Greg Bryan

Greg is Senior Manager, Enterprise Research at TeleGeography. He's spent the last decade and a half at TeleGeography developing many of our pricing products and reports about enterprise networks. He is a frequent speaker at conferences about corporate wide area networks and enterprise telecom services. He also hosts our podcast, TeleGeography Explains the Internet.

Connect with Greg  

Jon Hjembo

Jon Hjembo

Senior Research Manager Jonathan Hjembo joined TeleGeography in 2009 and heads the company’s data center research, tracking capacity development and pricing trends in key global markets. He also specializes in research on international transport and internet infrastructure development, with a particular focus on Eastern Europe, and he maintains the dataset for TeleGeography’s website, internetexchangemap.com.

Connect with Jon