Zayo's zColo unit is undertaking a substantial expansion, adding five new markets. The company has leased space down in Memphis, in the three largest Ohio markets of Cincinnati, Columbus, and Cleveland, and in Plymouth MN which lies 15 miles northwest of Minneapolis. In all, the company is increasing its colocation footprint by 46,404 square feet of space, or 40%. They will use that space to offer interconnection and other services to their customer base, including meet-me rooms in the spirit of their 60 Hudson Street facility.
Ever since they closed the purchase of Fibernet Telecom Group in the fall of 2009, I have wondered just what Zayo's plans for the unit were. Well, the fiber part was obvious, but the interconnection part seemed like an incomplete thought initially. Fibernet had been doing rather well, but its expansion was constrained by capital and certainly Zayo's resources changed that. But now we see also that zColo is taking the interconnection model beyond the tier 1 colo markets of New York and Los Angeles, and into less traveled areas that Fibernet wouldn't have tried even if they could but where Zayo has assets to leverage and competition is light. They might have added space in the larger markets of Atlanta and Philadelphia, but chose these less crowded spots (including Nashville a few months ago) to attack first.
If this expansion goes well, I'm sure we will see further expansions within Zayo's regional and metro fiber footprint. Indianapolis would seem likely, for instance.
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