In 2008, 57% of respondents in 'The 2008 State of Agile Development' survey conducted by VersionOne, stated that their Agile teams were distributed. Furthermore 41% of respondents said that they were currently using, or plan to combine, the agile model with distributed development.
Predictably, by the time the 2011 survey rolled out, those numbers had gone up considerably. In 2011, a full two-thirds, or 65%, of the survey's respondents reported working in organizations with distributed development teams; and an astonishing 77% of respondents reported that they were currently using, or planned to combine, the agile model methods with distributed development.
Why is this significant? Because colocation is undoubtedly the best way to do Agile. Colocation maximizes communication opportunities within a team, which in turn means better efficiency and reduced risk 
As businesses enter new geopraphies in search of new opportunities, they have had to accommodate DNA-altering changes; and almost always, the first area of change is to the texture of their human capital.
Highly competitive businesses hiring the best professionals from all over the world have to deal with non-trivial geo-political constraints, such as the willingness of their employees to relocate, the costs of such relocations, procedural constraints such as work permit issues, etc.
To circumvent these challenges, it is not uncommon for today's companies to set up offices in multiple locations around the world, and source local employees who are then required to integrate with their colleagues spread over multiple time zones.Hence the need for Distributed Agile Methodology.
Gone are the days when a company manufactured / created all pieces of the product. The quest for higher profitability has pushed many organizations to make their production and supply chains as flexible and modular as possible, whereby independent pieces of a product and / or their processes can be decoupled and sourced from cheaper markets.
In such situations, success calls for frequent and close collaboration between vendors and their customer organizations.
 David Norton, Making the Most of 'Agile' in a Distributed Development Environment, Gartner Research G00159246, August 2008