Data Center Colocation industry is BOOMING! Vacancy rates plummet as data center operators struggle to keep up with demand.

If you’re looking for a snapshot that indicates the general health of the global colocation industry look no further than this report by telecom research firm Telegeography.  At a time when the worldwide economy is struggling to keep its feet, the data center colocation sector is (almost) embarrassingly healthy.

This graphic boils down the exhaustive data collected and analyzed by Telegeography for six major colocation markets.  In each of these major cities, during the period from Sept 2010 to Sept 2011, colocation vacancy rates fell dramatically.  In the case of New York City, vacancy rates fell from 36% in 2010 to 23% in 2011.  That’s a fairly impressive statistic on its own.  But when you consider that data center construction added 1.3 million square feet in NY during that same period the stat is mind blowing.  Hong Kong, London and San Francisco also had robust construction and show rapidly declining vacancy rates.

Also extremely impressive is the 16% vacancy rate in the Washington DC area.  (Down from 30% last year.)

The complete Telegeography colocation database can be found here (for a hefty fee.)

The best news of all comes in this happy statement from TeleGeography analyst Jon Hjembo; “It’s unlikely that the pace of expansion will slow anytime soon.  While operators are adding capacity, vacancy rates in a number of metro markets we surveyed remain under 25 percent.”

In the dismal days following the dotcom bubble burst, you couldn’t swing a cat without hitting an empty data center.  For those of you who were in the industry back then, congratulations!  You have seen a full cycle in the data center industry.  From bubble, through bust and back to boom.  Let’s all hope the new cycle isn’t a bubble at all.  Rather, let’s hope this is the start of a new golden age of data center construction that meets demand generated by companies with actual business plans.



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