Colocation prices vary widely between, within Metros

23 Jul 2015

New data from TeleGeography’s Colocation Pricing Service reveal that colocation services are far from commoditised globally, as baseline colocation prices – or prices per unit of power – differ widely by geography.

While the median monthly price per kilowatt for a cabinet with a power density of four kilowatts is nearly identical, at around USD400, across key markets in Europe and Asia, the median price in North America is 40% lower, and prices vary even more considerably within each region.

Prices in three of Europe’s core colocation hub markets – Amsterdam, Frankfurt, and Paris – are well below the regional median, at USD245, USD321 and USD328 per kilowatt per month, respectively. The median monthly price per kilowatt in London, the largest European hub, is USD444, or nearly double that in Amsterdam. Despite the high median across Asian markets, the baseline price in Taipei is just USD265 per kilowatt per month. Conversely, in North America, several markets like Toronto, New York, and Phoenix register prices well above the regional median, at USD450, USD395 and USD351 per month.

Price ranges within specific metro areas are also significant. For example, in the competitive and geographically vast markets of London and New York, price disparities are particularly pronounced, with USD550-USD600 per kilowatt separating the lowest and highest prices. Colocation prices in Miami and Amsterdam fall in a much tighter band, with differences of just USD150 and USD200, respectively, between the low and high rates. A number of factors contribute to price differences within markets, including the diversity of customer niches served, the relative geographical positioning of data centres, and the degree to which colocation is commoditised.

‘As with power, cross-connect and cabinet installation prices can vary greatly,’ said TeleGeography analyst Jonathan Hjembo. ‘Therefore, it is important for colocation customers to examine how each of these components will affect the overall contract price, based on their specific requirements and locations.’

TeleGeography’s Colocation Pricing Service provides in-depth pricing data and expert analysis for 32 major colocation markets around the world.

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