Colocation Pricing Trends To Watch

The pressures of supply chain disruptions, electricity price volatility, and government intervention are impacting prices in the global colocation market.

As we continue to move through 2023, here are a couple of trends to keep an eye on.

Inflation in European electricity costs has settled down significantly following 2022's surge. This does not preclude continued volatility. Complications in power delivery specific to individual countries, government actions, and lags in wholesale contract renewals will be among many factors complicating the relationship between spot rates and the ultimate power prices passed down to data center operators and their customers.

U.S. markets will not be immune to the inflationary pressures of the global market. Localized competition will continue to temper the effect, but the surge in cross connect rates we've already seen will likely be followed by rising colocation rates.

The biggest ongoing concern in the data center market will be the availability of power and space to develop further in key markets. As regulators and utilities continue to push sustainability goals for the industry, inflation will continue to be high in markets like Singapore, Frankfurt, and Amsterdam.

Our Data Center Research Service is a comprehensive guide for understanding data centers, network storage, and the nature of interconnection.