Montréal + Québec City DCI Report 2019: Data Centre Colocation, Hyperscale Cloud & Interconnection

Not widely seen as a data centre hub even in the early part of this decade, Montréal and Québec City have now basically pulled even with Toronto, when it comes to total inventory measured in MW, and will race ahead as early as next year.

This is a market that has been almost entirely shaped by hyperscale cloud and its steady consumption of wholesale data centre capacity. Hyperscale clouds chose Montréal as their default Canadian location due to the array of advantages
in the underlying economics around energy, real estate and climate. Combined with a declining exchange rate, improving cloud adoption rates and the growing importance of data sovereignty, the timing could not have been better. And Montréal and Québec took full advantage. Working in tandem with government, data centre operators have pushed this value proposition successfully and every major cloud that has landed in Canada now has infrastructure presence in Québec.

The cloud growth spurt in Canada helped a number of independent operators grow very rapidly and almost as quickly, they were subsequently acquired by US-based platforms. This is a market that is

now dominated mostly by US entities that have hyperscale customer bases that want to expand to as many locations as possible and have prioritized Canada on their roadmaps. In the next few years, Montréal will see the effects of this dynamic as inventory continues to be built and absorbed by hyperscale customers at a steady clip.

On the retail colocation side, Montréal is a more modest market and top-heavier than most. And similar to other primary data centre markets, separation is growing between providers that offer meaningful value-add and those that do not. In Montréal, value-add is not just about on-ramps to cloud, but power-dense compute infrastructure that can support a number of emerging industries that have clustered in the city.

While the story of Montréal is mostly about hyperscale, there is always the competitive dynamic with Toronto to consider. Montréal has been winning the hyperscale battle for the past several years, but there is going to be a gradual shift in
that split as workload requirements and clusters
of end users override the cost component when considering where to place infrastructure.

The Montréal data centre market has a healthy future and shows no signs of slowing down. In 2019, the Montréal market will generate USD $152.7m in revenue and grow at a five-year CAGR of 21.7%. But it is the growth in MW inventory over this five-year period that is a true measure of where this market is headed. This report is an excellent resource for any service provider, investor or enterprise end user looking to understand and project the data centre market in Montréal or find a service provider.