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.
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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.
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.