IDC Marketscape IDC Marketscape: Worldwide Colocation and Interconnection Services 2019–2020 Vendor Assessment

IDC MarketScape IDC MarketScape: Worldwide Colocation and Interconnection Services 2019–2020 Vendor Assessment

Courtney Munroe

IDC MARKETSCAPE FIGURE

FIGURE 1

IDC MarketScape Worldwide Colocation and Interconnection Services Vendor Assessment

Source: IDC, 2019

December 2019, IDC #US45717419 Please see the Appendix for detailed methodology, market definition, and scoring criteria.

IDC OPINION

This study leverages the IDC MarketScape methodology to evaluate several major colocation and interconnection providers around the world. IDC identified several leading providers from North America, Europe, and Asia/Pacific (AP). They are a diverse selection ranging in size and specialty. IDC included both wholesale and retail-oriented companies and companies that also offer managed services.

Colocation and interconnection services are defined as a customer's use of a third party's datacenter facilities (i.e., physical floor/cage/rack space, network capacity, and HVAC/power infrastructure) in which the customer operates its own servers/storage systems, network equipment, and other types of infrastructure.

Over the past 12 months, the colocation and interconnection sector has experienced steady growth driven by several key factors:

. There is hyperscale demand for third-party facilities. Demand for space and power in the key technology corridors in Northern Virginia, New York, Los Angeles, and Atlanta continues unabated. The demand has also extended to second-tier cities and will fuel a wave of new construction that will extend into 2020. . The consolidation and downsizing of enterprise datacenters continues to push traffic to colocation providers. While enterprises are migrating workloads to public cloud environments, they also need consulting and managed cloud services that can be adequately provided by colocation providers. A diverse array of providers has emerged to cater to every need, whether domestic, global, or specialized around managed services or bare metal facilities. . The colocation market is in transition. Some companies have retreated from managed services to focus on the more lucrative hyperscale market. However, the enterprise segment represents a significant market opportunity for colocation and interconnection services. To leverage access to cloud providers, interconnection services will provide a more cost effective and flexible networking service than traditional connectivity services. . Ancillary services such as access to virtualized workloads, security services, and on-demand server capabilities will become increasingly important to colocation providers. The key to success will be the ability to offer the most efficient datacenters leverage highly automated processes and fortresslike security environments.

IDC MARKETSCAPE VENDOR INCLUSION CRITERIA

IDC had two primary criteria for inclusion in this vendor assessment:

. Companies with an international footprint in at least two continents . Companies with at least $500 million in annual revenue Most companies qualified on both counts. The exceptions are CoreSite, which has only United States– based properties and serves international locations via partners, and Rackspace, which qualified based on its global reach but did not meet the revenue criterion.

. Define your requirements: The colocation sector is in transition. The wholesale segment driven by the hyperscale sector is driving expansion and growth. This sector has very specific requirements for cooling and space, while the retail sector requires more hands-on managed services. However, some companies are focusing less on retail and managed services because they lack the significant personnel and expertise as well as the capability to implement finely honed automation and virtualized services. . Interconnection capabilities: The best providers will offer a wide range of network providers, internet exchange (IX) facilities, and access to major cloud providers. Some colocation providers' on-net capabilities that offer WAN scalability and visibility will increasingly become table stakes. . Ecosystem marketplace: Enterprises are downsizing in-house datacenters and increasingly leveraging colocation facilities to access software and hardware vendors for virtualized services, security services, and on-demand capabilities. Best-of-breed partnerships should be easily accessible. . Consulting and cloud migration services: Some companies offer expertise to help enterprises optimize networking and establish a cloud migration road map.

VENDOR SUMMARY PROFILES

This section briefly explains IDC's key observations resulting in a vendor's position in the IDC MarketScape. While every vendor is evaluated against each of the criteria outlined in the Appendix, the description here provides a summary of each vendor's strengths and challenges. CoreSite CoreSite is positioned in the Major Player category in the 2019–2020 IDC MarketScape for colocation and interconnection services.

CoreSite operates 23 datacenters in 8 U.S. metro markets and international via partners. The company may have one of the smallest footprints in this study, but it has become a strong player in the interconnection and hybrid cloud sector. CoreSite was founded in 2001 as CRG West and rebranded as CoreSite in 2009. The company operates datacenters in 8 major metro markets across the United States serving more than 1,350 customers and has a portfolio totaling more than 4.1 million total datacenter net rentable square feet (NRSF), which includes 1.7 million NRSF under construction or held for development. Strengths CoreSite is a major datacenter and colocation provider because of its locations in key markets and its strong SLA. The company offers a 100% uptime guarantee. The company's key focus area and differentiator is the provision of high-performance datacenter solutions in communication hubs. CoreSite supports hybrid and multicloud strategies through providing on-ramps to major public cloud and IT service providers. Since 2013, the company has operated the CoreSite Open Cloud Exchange, a one-to-many cloud platform launched in 2013, to increase API functionality, capacity management, and service provider availability. It also offers the marketplace that lists network operators, cloud providers, partner, and value-added service providers. The company is well respected in the industry for its high-performance capabilities and the diverse array of tier 1e cloud and network providers in its ecosystem.

©2019 IDC #US45717419 3 Challenges CoreSite's key differentiator is the company's ability to maintain a high-quality of service (QoS) as measured by low latency, high availability, and traffic throughput. While this has served it well so far, the lack of owned international facilities to leverage growth in the Asia/Pacific and Europe could be a possible growth inhibitor if the U.S. market slows down in the coming years. Consider CoreSite When The company provides high-performance datacenters to hyperscale cloud providers and large enterprises alike that need scalable solutions as well as industry-specific secure and compliant facilities. The company also offers migration capabilities to small companies that lack expertise in colocation and cloud connect. Finally, it offers a diverse range of interconnection solutions to cloud and network providers. CyrusOne CyrusOne is positioned in the Major Player category in the 2019–2020 IDC MarketScape for colocation and interconnection services.

CyrusOne was launched in 2011, with the construction of a 1 million square feet facility in Phoenix, Arizona. Over the past eight years, the company has grown steadily via acquisition and organically into one of the largest midtier providers in the industry, with 45 datacenters in 4 countries and more than 4 million square feet under management. Over the ensuing years, CyrusOne launched a National Internet Exchange. It acquired the datacenter facilities of Cervalis in 2015, which gave it a presence in the New York market. The company has grown steadily and has established a strong niche as a hyperscale provider with strong diverse industry solutions. CyrusOne has its own datacenters in North America and Europe and partners with GDS in China and ODATA in Latin America to provide facilities in those countries. Strengths CyrusOne has been a pioneer in this industry over the duration of its history. The company established an industry-specific internet exchange and a National Internet Exchange several years ago. It has focused on custom build to suit and rapid construction of hyperscale facilities, with full datacenter construction in two to six months. The company caters to cloud and network providers with its National IX platform. It also facilitates efficient connectivity for hybrid cloud configurations with its "Sky to the Cloud" platform, which facilitates interconnection and edge-to-cloud connectivity. The company also focuses on compliant-based facilities to several verticals, including federal, finance, and healthcare segments. Challenges CyrusOne has a strong presence in the U.S. Northeast and Texas. It does have gaps in some major cities in the Southeast and West Coast, although it does have plans to invest in additional cities, driven by strong double-digit revenue growth. Consider CyrusOne When CyrusOne is ideally suited for hyperscale cloud providers and enterprises that need wholesale facilities and rapid implementation of build-to-suit facilities. While the company is not in all major U.S. metro markets, it is well represented in key European cities and has strategic partnerships in key metro markets in Asia and South America.

Cyxtera is a security-oriented datacenter and colocation company. The company was launched in May 2017 with the acquisition of CenturyLink's datacenter and colocation assets. This business was merged with security portfolio of several companies including Cryptozone, Catbird, Easy Solutions, and Brainspace. The company's key differentiation is that its portfolio extends beyond datacenter space and power to the ability to offer complex hybrid IT services on a secure and resilient global platform.

Cyxtera offers global services in 60 datacenters in 29 metro markets in North America, Europe, and the Asia/Pacific region. The company serves over 2,300 companies and has 2.9 million square feet of datacenter floor space with a 250MW capacity. Cyxtera is also a major interconnection provider, offering interconnection to 600 networks and 120 network providers, as well as cloud access to all the major public cloud providers. Cyxtera claims to be one of the largest interconnection capabilities in the world, serving 40,000 cross connects. Strengths Cyxtera has carved out a strong identity around two key areas. The company has an organic heritage as security company from its inception and has designed its portfolio with security in mind. It's a smart move as security is a perennial concern of enterprises. "Security integrated as a core service," according to the company. This provides a strong advantage in key verticals such as government and service providers. The other key foundation and unique aspect of the Cyxtera is its on-demand dynamic software-driven functionality, the Cyxtera Extensible Data Center (CXD), which offers programmable interconnection, and datacenter infrastructure, that is preconfigured and scalable. Cyxtera has already recruited prominent infrastructure vendors as part of its catalogue (HPE and Fujitsu) and is working to add more vendors to the marketplace. Challenges Cyxtera is a global company that lacks the scale and reach of the large global companies. It is also a fairly young company that is punching about its weight. Given its short history, the company has done well to gain traction in the industry largely because of its customer base and channel partners. It also does not have an extensive global presence, although it does have datacenter locations in most major metro markets around the world. Consider Cyxtera When Cyxtera offers a strong interconnection platform in key markets with all the major networking and cloud providers. If you are looking for a managed services partner to provide a security road map, with an elastic and programmable infrastructure requirement, Cyxtera is the ideal solution. Digital Realty Trust Digital Realty Trust is positioned in the Leader category in the 2019–2020 IDC MarketScape for colocation and interconnection services

©2019 IDC #US45717419 5 Digital Realty was established as a REIT in 2004 IPO with 21 properties in North America. Over the ensuing years, the company expanded to Europe and the Asia/Pacific region. The Telx acquisition in 2015 was a pivotal move that launched into the retail colocation and interconnection segment. Over the past two years, the company has added major assets with strategic acquisitions and alliances in Europe. These include Telecity in 2016, a joint venture (JV) with Mitsubishi to provide datacenter solutions in Japan, and the Ascenty acquisition in Brazil, which provides a much-needed Latin America presence. More recently, on October 29, Interxion accepted a bid of US$8.4 billion to be acquired by Digital Realty Trust in what could be the largest datacenter deal in history. The addition of Interxion datacenter sites expands Digital Realty's European presence from 4 countries to 11 and will expand the total number of datacenters worldwide to 250, once the acquisition closes. Digital Realty now has 210 datacenters in 35 metro markets across 14 countries on 5 continents. Digital Realty is the second- largest datacenter provider in the world. Strengths Digital Realty's strengths are its ubiquitous North American coverage, where it built its success on rigorous facilities deployment, management and operations processes, and the ability to negotiate with critical infrastructure providers. As a wholesale colocation provider, Digital Realty supports hyperscale customers, and demand in this segment is strong. Over the past two years, Digital Realty has steadily expanded into the retail sector as well as the Asia/Pacific and Latin America region. In November 2019, the company launched PlatformDIGITAL, which is a global scalable platform designed to enable digital transformation in a consistent modular basis. The platform features four key solutions to solve what the company terms as "data gravity challenges to enable digital transformation at scale." These include:

. Network Hub: A network optimization solution to consolidate and global traffic at major local hubs . Control Hub: Adjacent security and IT tools and controls . Data Hub: Optimizes data aggregation, analytics, and streaming applications . SX Fabric: An SDN overlay that manages data traffic for optimized distributed workflow Challenges Digital Realty has done an admirable job of transform from a classic REIT to a differentiated company with a diverse portfolio of services. The biggest challenge for Digital Realty will be to prove it can offer a seamless global infrastructure that can scale more cost effectively than any provider. The company is also striving to be a global retail and interconnection platform. Only time will tell whether it can offer a more seamless and cost-effective portfolio in the Americas while competing effectively against the strong regional players in Europe and Asia/Pacific. Consider Digital Realty When Digital Realty has implemented a strong road map for both hyperscale entities and global geographically distributed enterprises. The company can provide gobs of wholesale space and power, as well as required foundations to enable enterprise digital-ready foundation including networking, an interconnection platform, and analytical and data management tools to facilitate the establishment of a seamless global platform.

Equinix has evolved steadily over the past two decades to become a global datacenter powerhouse. With an optimistic outlook for strong future growth, the company is well poised to take advantage of emerging IT innovation over the next few years.

The company has a mission to protect, connect, and power the digital world, and it has built a platform with a solid investment strategy and a proven record of innovation to back its goal. Platform Equinix was designed to reach everywhere, interconnect everyone, and integrate everything across 204 IBXs in 53 metro markets in 24 countries across 5 continents. The company has 9,800+ customers, including 2,900 cloud/IT providers, 1,800+ networks, and 3,000+ enterprises as well as 1,250+ financial services entities and 675+ content and media providers. These companies leverage the platform to securely and privately exchange traffic across 356,000+ physical and virtual interconnections. The company has a solid investment strategy and a proven record of innovation to back its claims.

It has and continues to launch new services, including its most recently debuted, Network Edge services, which is an innovation enabling companies to leverage the power of network function virtualization (NFV) to modernize networks virtually by deploying on-demand services from an ecosystem of vendors to dynamically connect their digital supply chains at Equinix. These types of services will facilitate digital transactions closer to the digital edge where economies of aggregation bring together customers, partners, employees, and clouds in most major metro markets around the world. Strengths Equinix's strength is the company's comprehensive global footprint that has seen its brand become synonymous with neutral colocation datacenters. It is at the center of the rapidly evolving cloud marketplace ecosystem that facilitates a wide range of interconnection between diverse entities ranging from network service providers, content providers, and public cloud providers to enterprises. Equinix Cloud Exchange Fabric is an innovation that has simplified the concept of a global cloud fabric. In combination with the strategic locations, access to the richest ecosystems, and ability to integrate edge services on demand, Platform Equinix provides customers value that is extremely difficult and expensive for its rivals to emulate. It also has a solid strategy in place to leverage the surging growth in hyperscale cloud companies. Equinix datacenters focus on a select group of hyperscale companies that offer significant value to the cloud ecosystem currently at Equinix. The company has moved rapidly beyond the provision of space and power to the position of a digital enabler for several verticals that are early adopters of cutting-edge digital platforms. These include high-availability platforms for the financial sector, as well as scalability for content and media providers. The deployment of core hyperscale infrastructure at Equinix serves as a magnet, creating a gravity effect that attracts additional partners, application developers, and other hyperscale vendors to Equinix's ecosystem, increasing the choice and innovation opportunities for current Equinix customers. Equinix is also a leader in leveraging sustainable and renewable energy sources. Equinix was the first datacenter company to publish a comprehensive ESG sustainability report and has also established a goal of implementing 100% renewable energy. The company is also an early adopter of the VPPA approach to the acquisition of large-scale renewable energy and regularly reports on its sustainability efforts and achievements.

©2019 IDC #US45717419 7 Challenges While Equinix has a broad and deep portfolio, it can be undercut on pricing by smaller regional providers on single capabilities. However, if a wider lens is used, across a broader set of requirements, its premium pricing is offset by much larger savings and benefits. Consider Equinix When You are a global enterprise or service provider that needs to remove the distance between your users, cloud services, ecosystem partners, and customers across your edge to meet the high-performance and low-latency demands of digital. As you transform your architecture to become digital ready, consider Equinix when you are optimizing the network to reduce costs and improve scale across strategic locations, simplifying hybrid multicloud access, distributing security controls to manage risk, or distributing data and analytics to optimize edge computing needs. You require a high-availability and scalable platform by a company that is also deeply devoted to sustainability. Interxion Interxion is positioned in the Major Player category in the 2019–2020 IDC MarketScape for colocation and interconnection services.

Over the past two decades, Interxion has been one of the prominent European colocation and interconnection services providers. The company has compiled an asset base that includes 53 datacenters in 13 cities in 11 countries across Europe. It provides colocation, datacenter facilities, and other services to 2,000 customers, including 700 network providers, 20 internet exchanges, and several hundred platform providers. Over the past decade, the company has grown steadily via investment in real estate and strategic fiber landing facilities across the continent. On October 29, 2019, Digital Realty Trust and Interxion announced an $8.4 billion merger in which Digital Realty will acquire the assets of Interxion and net debt. Strengths The company is first and foremost an interconnection provider that offers a comprehensive solution of networking to internet exchanges, network providers, and cloud providers. It offers bespoke cloud connectivity via VLANs to a wide range of cloud platforms. Its IX interconnect platform offers a high number of IP Transit and Peering in Europe, supporting access to 20 internet exchange providers with 3,000 peering options. It also offers preconfigured cross connects supporting thousands of physical cross connects annually. Finally, the company has strategic fiber landing facilities in Europe, with facilities at key international gateway points to MEA, Asia, and the Americas. Challenges Interxion has done a great job providing a comprehensive platform for interconnection and colocation in key European markets. While cloud connection continues to grow, the company faced saturation in key European markets, with no presence outside Europe in key growth markets of the Americas, MEA, and Asia/Pacific regions. Consider Interxion When For companies seeking access to key European markets and interconnection with networks and internet peering companies, Interxion offers comprehensive coverage at key strategic gateway points in Europe. The combination of Interxion and Digital Realty will bring a world-class global platform for MNCs and cloud and network providers seeking access to the majority of key global markets.

©2019 IDC #US45717419 8 NTT Global Data Center Division NTT Global Data Center Division is positioned in the Leader category in the 2019–2020 IDC MarketScape for colocation and interconnection services.

In July 2019, NTT Ltd., based in London, United Kingdom, was launched. This is a new subsidiary of NTT Inc. and is a consolidation of the global, non-Japanese segments of the 31 different brands encompassed by NTT Communications, Dimension Data, and NTT Security. In FY18, NTT Ltd. accounted for 58% of NTT Inc.'s total revenue.

NTT offers a tier 1 global IP network, spanning 44 metro markets around the world. It is still one of the few network providers with a strong cloud infrastructure-as-a-service (IaaS) portfolio with the ability to offer private cloud and managed public cloud solutions. The new datacenter unit includes internal NTT assets and several companies acquired over several years, including DPA, e-shelter, Gyron, Netmagic, NTT Indonesia Nexcenter, and RagingWire. NTT is also one of the top 3 datacenter operators, alongside Digital Realty Trust and Equinix. NTT offers both wholesale and retail datacenter, colocation, and cloud connect access with facilities in 20 countries. In October 2019, the company reiterated its plans to continue investing in strategic growth metro markets around the world. Strengths NTT has 150 datacenter locations around the world in over 20 countries. The company has approximately 4 million square feet of floor space under management and offers a diverse range of compute, IT, and network services to both hyperscale companies and enterprises. While NTT is primarily a hyperscale provider, it also provides what it terms enhanced IT capabilities to enterprises including managed hosting, colocation, hybrid cloud services, and network services. Its network services are marketed under the SD X brand. NTT's Software-Defined Exchange Services offers colocation and cloud access to public cloud providers. This includes SD WAN and L2 connectivity to network providers and IaaS providers. NTT's network backbone as well as datacenter facilities should attract new clientele and expand wallet share with cross-sell/upsell opportunities in MNC organizations. Challenges The key challenge for NTT as it moves forward is around branding and marketing. The company has a stellar reputation as a hyperscale datacenter provider. While it is well known in Japan and the AP region for its retail enterprise portfolio, it still lags behind in this segment in Europe and North America. NTT will also benefit in time from the transformation and consolidation of the various NTT divisions and subsidiaries. Consider NTT Global Data Center Division When The new NTT is a highly diverse ICT service provider and offers an unparallel portfolio of ICT services. NTT offers global MNCs a true one-stop capability that spans design, consulting, and systems integration to hybrid IT management and global software-defined networking and interconnection. NTT is also known of a high quality of service and offers a forward-looking road map that will allow enterprises to leverage a diverse range of expertise and cutting-edge facilities. Rackspace Rackspace is positioned in the Major Player category in the 2019–2020 IDC MarketScape for colocation and interconnection services.

©2019 IDC #US45717419 9 Rackspace, the Austin, Texas-based managed cloud company, has a unique colocation market strategy. The company offers a comprehensive portfolio of life-cycle services to enable enterprise digital transformation. From managed hosting to managed private and public cloud to colocation, Rackspace offers the requisite consultation, migration, and operations support to facilitate digital transformation. Colocation is offered in the context of this overall life-cycle management approach. Rackspace is a relative newcomer to the colocation, entering this segment with the acquisition of Datapipe in mid-2018. The company offers colocation and interconnection services in 25 datacenters in North America, Europe, and Asia/Pacific. The company has 12 company-owned datacenters and leverages partner facilities in another 13 datacenters with plans to add several partner sites over the next several months. Strengths Rackspace provides a wide variety of services in addition to colocation services. The company does not compete with the giants of the industry, but its differentiator is the ability to cloud enable companies that are at the initial phase of migrating to the cloud. Because of comprehensive Rackspace Hosting, Managed Hybrid Cloud ecosystem, it offers a wide range of initial "lift and shift" and a road map for private cloud, public cloud, and interconnection services that can be scaled as companies grow and become more adept at leveraging the cloud. Colocation is offered as piece of the puzzle. It is typically not a leading offer but one of many capabilities that Rackspace can provide. Challenges Rackspace is not primarily a colocation provider, nor does it offer the scale of floor space and other capabilities necessary to most effectively compete in this area. Therefore, it is not necessarily the first choice for colocation. One of the key reasons is that since the acquisition of Datapipe, Rackspace has not marketed colocation as key service offering. However, during late 2019, the company has increasingly made colocation a more visible portfolio option, which could bode well for its future growth. Consider Rackspace Colocation When If you are a company that is beginning the cloud journey, then Rackspace is an ideal company. It offers a wide range of managed services and its "fanatical" support to guide companies with a road map. Its global presence and scale via strategic partnership also offers large enterprises a strong global partner that can ably fill gaps in their colocation requirements. Telehouse Telehouse is positioned in the Major Player category in the 2019–2020 IDC MarketScape for colocation and interconnection services.

Telehouse is a subsidiary of the Japanese telecommunications service provider KDDI. The company has been in operation since 1989, with the construction of its first datacenter in New York in 1989. The company currently has 45 datacenters on several continents around the world, in over 23 markets in the United States, EMEA, and Asia/Pacific. The company has aggressively expanded since its founding, achieving several "firsts" with the deployment of colocations centers in London, Paris, South Africa, and other locations in the 1990s. The company offers datacenters space and power and interconnection services to network and cloud providers. It currently has 4 million square feet under management.

©2019 IDC #US45717419 10 Strengths Telehouse's key differentiator is the company's ability to offer services in emerging markets such as Russia, China, and South Africa. In addition, the company also has a strong focus on customer service and reliability, boasting 99.999% uptime, and its deep expertise of colocation and interconnection fed by its 30-year-old heritage. The company offers shared, caged, and dedicated suites primarily to enterprises as well as carrier interconnect and cloud connect to hyperscale providers via its Telehouse Cloud Link platform. It also offers a suite of managed services ranging from basic remote management to monitoring and disaster recovery. Challenges Telehouse is a strong competitor with a long heritage in the industry. It has stuck closely to its formula of colocation, interconnection, and managed services. Its partnership with KDDI ensures the company of a strong network and resource partner. It's not aggressive in terms of marketing and has made no aggressive expansion since launching its second Osaka datacenter in 2015. Consider Telehouse When Enterprises that need colocation and interconnection services in major cities around the world will find Telehouse a rock-solid provider, with extensive local knowledge and reliability in the top metro markets around the world. The company also offers interconnection with a large number of network and internet peering companies. It also has the advantage of being affiliated by one of the largest and innovative Asian networking entities in KDDI.

APPENDIX

Reading an IDC MarketScape Graph For the purposes of this analysis, IDC divided potential key measures for success into two primary categories: capabilities and strategies.

Positioning on the y-axis reflects the vendor's current capabilities and menu of services and how well aligned the vendor is to customer needs. The capabilities category focuses on the capabilities of the company and product today, here and now. Under this category, IDC analysts will look at how well a vendor is building/delivering capabilities that enable it to execute its chosen strategy in the market.

Positioning on the x-axis, or strategies axis, indicates how well the vendor's future strategy aligns with what customers will require in three to five years. The strategies category focuses on high-level decisions and underlying assumptions about offerings, customer segments, and business and go-to- market plans for the next three to five years.

The size of the individual vendor markers in the IDC MarketScape represents the market share of each individual vendor within the specific market segment being assessed. IDC MarketScape Methodology IDC MarketScape criteria selection, weightings, and vendor scores represent well-researched IDC judgment about the market and specific vendors. IDC analysts tailor the range of standard characteristics by which vendors are measured through structured discussions, surveys, and interviews with market leaders, participants, and end users. Market weightings are based on user interviews, buyer surveys, and the input of IDC experts in each market. IDC analysts base individual

©2019 IDC #US45717419 11 vendor scores, and ultimately vendor positions on the IDC MarketScape, on detailed surveys and interviews with the vendors, publicly available information, and end-user experiences in an effort to provide an accurate and consistent assessment of each vendor's characteristics, behavior, and capability. Market Definition Colocation services are defined as a customer's use of a third party's datacenter facilities (i.e., physical floor/cage/rack space, network capacity, and HVAC/power infrastructure) in which the customer operates its own servers/storage systems, network equipment, and other types of infrastructure.

. Retail colocation: This segment includes the rental of rack/cage/cabinet space in the datacenter, network capacity within the datacenter, and access to/use of critical facilities infrastructure such as power and cooling. The customer retains ownership of the equipment housed in the datacenter (typically servers, storage, and networking devices such as firewalls and load balancers) and controls and manages the IT environment. Contracts are typically short to medium term in duration and include a reserved amount of power per rack. . Wholesale colocation: In this segment, the customer leases the building/shell or data hall/suite level rather than the smaller scale of retail colocation (racks/cages/cabinets). Projects generally involve heavily customized builds, although many operators in this segment are moving toward a mix of build-to-suit and turnkey offerings. Customers of wholesale colocation are typically hyperscale content and media/entertainment providers, scale-oriented cloud service providers, and hosting, IT managed services, and telecommunications companies. . Interconnection: Colocation providers facilitate digital exchange points for network providers, internet peering providers, cloud providers, content providers, managed service providers, and enterprises to connect to each other's networks. The modern hyperconnected digital ecosystem relies on low-latency, scalable bandwidth. These carrier-neutral facilities offer direct one-to-one, one-to-many, or many-to-many connectivity as required by each segment. This is an essential aspect of the colocation business and will become increasingly important in the future. . Managed services: Colocation providers also offer a range of managed services to enterprises including remote configuration, on-demand compute, and server capabilities, as well as monitoring, security, and cabling services. Strategies and Capabilities Criteria Tables 1 and 2 include market-specific definitions and weights specifically tailored for colocation and interconnection providers. This was used to measure vendor's performance and their specific place on the IDC MarketScape chart. Table 1 shows the definitions and weighting criteria used to evaluate colocation and interconnection providers' strategies. Table 2 shows the definitions and weighting criteria used to evaluate colocation and interconnection providers' capabilities.

Key Strategy Measures for Success: Worldwide Colocation and Interconnection Services

Strategies Criteria Definition Weight (%)

Functionality or offering strategy The vendor has a road map based on customer and partner input that 10.00 covers space, power, interconnection, and other services.

Financial/funding The vendor demonstrates consistent growth or increase in market share. 5.00

Growth The vendor has plans to expand service beyond its core segment of 15.00 power and space.

Innovation The vendor demonstrates its ability to offer innovative solutions 15.00 anticipating market needs while staying ahead of the competition.

Delivery The vendor demonstrates plans of datacenters expansion. 20.00

Interconnection strategy The vendor offers an on-net global cloud fabric. 20.00

R&D pace/productivity The vendor has strong R&D program in partnership with key industry 5.00 players.

Channel strategy The vendor has a strong channel strategy. 10.00

Total 100.00

Source: IDC, 2019

Key Capability Measures for Success: Worldwide Colocation and Interconnection Services

Capabilities Criteria Definition Weight (%)

Portfolio benefits The vendor offers a wide range of space, power, a large number of 20.00 interconnection partners, and enhanced services.

Functionality or offering The vendor has a well-defined target segment. 15.00

Range of services The vendor offers significant floor space, geographical diversity, 15.00 and access to a wide range of cloud partners.

Customer service delivery The vendor offers global service on multiple continents. 10.00

Customer satisfaction It is the vendor's ability to offer basic and enhanced services. 10.00

Other resources offered The vendor offers diverse use cases, design, and consulting road 10.00 map.

Sustainable energy usage The vendor leverages solar, water, or innovative sustainable 5.00 energy adoption.

Total cost of ownership of The vendor demonstrates measurable efficiency of outsourced or 15.00 product/offering to IT buyer/user managed services capabilities.

Total 100.00

Source: IDC, 2019

LEARN MORE

Related Research . U.S. Enterprise Communications Survey, 2019: Hosting and Colocation Services (IDC #US44792219, November 2019) . Market Analysis Perspective: U.S. Hosting and Colocation Services, 2019 (IDC #US45541019, September 2019) Synopsis This IDC study presents a vendor assessment of the 2019 colocation and interconnection vendor market using the IDC MarketScape model. This assessment covers nine key colocation service providers on a worldwide basis. The assessment is based on current and future capabilities with a view of presenting a comprehensive analysis of enterprise requirements.

©2019 IDC #US45717419 14 "The migration to digital platforms, as well as the requirement for seamless and efficient interconnection to network providers, and cloud platforms is strong driver for the colocation and interconnection market for enterprises, content, and service providers. Colocation facilities offer additional enhanced and efficient options for service providers and enterprises alike and will continue to drive growth of the digital ecosystem," according to Courtney Munroe, GVP, Telecommunications Research at IDC.

©2019 IDC #US45717419 15 About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact- based decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company.

Global Headquarters

5 Speen Street Framingham, MA 01701 USA 508.872.8200 Twitter: @IDC idc-community.com www.idc.com

This IDC research document was published as part of an IDC continuous intelligence service, providing written research, analyst interactions, telebriefings, and conferences. Visit www.idc.com to learn more about IDC subscription and consulting services. To view a list of IDC offices worldwide, visit www.idc.com/offices. Please contact the IDC Hotline at 800.343.4952, ext. 7988 (or +1.508.988.7988) or [email protected] for information on applying the price of this document toward the purchase of an IDC service or for information on additional copies or web rights. IDC and IDC MarketScape are trademarks of International Data Group, Inc.