Data Centers Emerging as Competitors to Telcos for Transport, Interconnection

One feature of any competitive market in the internet era is that non-traditional suppliers can enter a market. Consider the volume of global internet data traffic carried by non-traditional suppliers. By some estimates, firms such as Google, Meta and Netflix carry as much as half of global traffic on their own networks, often on their own cables and facilities, both over wide areas and inside their own data centers, where they connect internet domains directly.

Consider large data center firms, for example. Using data from some firms that have been acquired, but which would have placed them in the top 10 of data centers globally, some estimates have such firms generate no less than eight percent of total revenue from connectivity services and connecting networks, up to a high of about 33 percent. 

Using more-conservative estimates, and cutting those figures in half, some “data centers” earn significant revenue as providers of connectivity services. 

Rank	Data Center Firm	Cross Connect	WAN Connections	Network Colocation	Total %
1	Equinix	17%	10%	6%	33%
2	Digital Realty	10%	6%	4%	20%
3	NTT Global Data Centers	6%	4%	2%	12%
4	CyrusOne	6%	4%	2%	12%
5	CoreSite	14%	8%	4%	26%
6	Switch	4%	2%	2%	8%
7	Interxion	10%	6%	4%	20%
8	Vantage	6%	4%	2%	12%
9	QTS Realty Trust	4%	2%	2%	8%

But that makes less sense these days when computing and communications are becoming more virtual all the time. Connecting two domains is the issue, not the distance those domains might be from each other in a physical sense. 

The point is that as telcos face new competitors for home broadband, data transport and network interconnection, so too do they face new competition from “data centers.”