Colocation vacancies point to rising demand

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Typically, vacancies expanding within retail colocation facilities point to a lack of demand for services and potential issues with excess supply. However, recent vacancies have been created by colocation providers striving to build fast enough to meet increases in demand, according to a recent TeleGeography study.

According to the news source, vacancies are on the rise in major global markets, including Los Angeles, Hong Kong and London. While this may appear like an issue, many vendors are working to build new facilities in these areas. In London, for example, approximately 70 percent of providers polled said they are planning to expand their colocation facility footprint despite the vacancy issue.

TeleGeography analyst Jon Hjembo explained that this current vacancy issue has been created because it takes so long to build data centers. He said that this time to market forces vendors to build new facilities in anticipation of demand.

“Colocation sites built in the past two years are filling at a faster rate than comparable sites were last year,” said Hjembo.

Many experts agree that colocation is rising because many businesses are becoming more comfortable with third-party IT solutions and are working to find ways to spend less money in the data center, but still get more done.