The APAC data centre market share has been witnessing exceptional growth since the outbreak of the COVID-19 pandemic, which has increased the access to internet-related services aided by lockdowns and restrictions imposed by government agencies across the region.
Colocation service providers witnessed a strong uptake of data centre spaces by existing customers owing to the growth in demand during the pandemic, forecasted analysts ResearchandMarkets in the company’s 2021-2026 APAC Data Centre Industry Outlook.
Due to the emergence of a new business environment, cloud service providers and video conferencing service providers have significantly contributed toward colocation and data centre services.
In Q3 2020, the market witnessed a strong spike in the announcement of new projects across India, China, Malaysia, and Japan.
How each country/region is faring to date:
Data centre construction witnessed no impact due to the pandemic, however, data centre operators implemented stringent precautionary regulations for the safety of their employees.
A country-wide lockdown lasted for around 60 days with a majority of operations performed via online and remote mediums, which increased internet users by 25%.
Around 70% of start-ups in India are adopting IoT technology, with healthcare and manufacturing segments attracting the highest investment.
In India, a rise in the cloud, big data, IoT, and artificial intelligence technology by enterprises is a major driver for the IT infrastructure market.
Data centres in India mainly use air-based and few facilities operate using water-based cooling systems. However, data centers are not completely suitable for free cooling. Few states in the country support free cooling of up to 1,000 hours annually.
High air pollution levels in major cities across India could make free cooling an unfeasible option for operators. Most high-density environments are likely to consider water-based cooling systems, while small-scale deployments could operate through air-based cooling systems in the country.
China and Hong Kong
The adoption of blade type servers is set to grow in both countries. Over 90% of data centres in China have adopted blade servers for the high-density computing environment.
The demand for supercomputers is also increasing with the adoption of digital currency in these countries.
Mega projects in China and Hong Kong data centre market are designed to be of Tier III and Tier IV standards, which are leading to a high deployment of 2N redundant UPS systems.
In both countries, a majority of data centres adopt a combination of air and water-based cooling techniques to cool down facilities. However, a few facilities are built to support free cooling techniques.
The IT infrastructure spending in Australia will be dominated by cloud-service providers, followed by enterprises, involving self-managed IT infrastructure solutions.
Over 50% of the business IT budget is spent on the migration to cloud-based services in Australia, with IaaS spending leading the chart.
Multiple data centre facilities with a power capacity of more than 10 MW are implemented in Australia, which is increasing the adoption of over 500 kVA capacity UPS systems.
The demand for modular data centre facilities deployed in Southeast Asian countries is high. The procurement of lithium-ion UPS is expected to grow in the region to avoid high OPEX on VRLA systems.
Data centre development is likely to be of higher capacity, typically over 5 MW, requiring the adoption of 2N redundant backup systems owing to challenges related to power fluctuations and outages.
The majority of data centres in Singapore are designed to adopt water-based cooling techniques.
In a separate and related report by Cushman and Wakefield on the Southeast Asian market, Singapore was selected by Facebook as their entry point into the Southeast Asian Data Centre Market. The new Facebook data centre will be the first to incorporate the new StatePoint Liquid Cooling system, an innovation targeted at the minimisation of water and power consumption.
Most data centres developed in Malaysia during the forecast period are expected to be greenfield.
Four cloud service provider companies – Microsoft, Google, Amazon and Telekom Malaysia (TM) – were recently given permission to build and manage hyper-scale data centres and cloud services in the country.
The market also has a strong potential for growth among modular data centre projects. The labour cost in Malaysia is cheaper than in Singapore. However, the availability of a skilled workforce will be a major challenge among providers.
The growth of the data centre construction market in APAC will aid in the development of facilities that would comprise multiple chillers, cooling towers, and CRAH units with N+N redundant configuration.
In terms of general construction, China leads greenfield construction. Hong Kong is expected to witness largely brownfield developments due to the space shortage during the forecast period. The majority of the construction contractors are located in these countries.
The increased interest to improve efficiency and reduce OPEX is driving data centre operators to procure intelligent DCIM solutions for end-to-end monitoring of facilities in India.
In the APAC region, several under-developed projects fall under the Tier III category, and the trend is expected to continue during the forecast period, with several operators likely to shift to the Tier IV category.
In terms of colocation, these facilities will cost higher per rack basis than Tier I and Tier II facilities. Most new data centres are designed as Tier III standards with a minimum of N+1 redundancy.
Tier IV data centres are equipped with minimum 2N+1 redundancy in every infrastructure that makes the facility fault-tolerant, with some facilities having 2N+2 redundancy of infrastructures such as UPS systems and PDUs.
Facebook, Apple, Microsoft, and Google are the major contributors to Tier IV data centres. These facilities generate more revenue for the APAC data centre market, with focused investment on highly efficient cooling systems.
How the vendors are faring:
According to ResearchandMarkets, Amazon Web Services, Microsoft, Alibaba, Tencent, IBM, Oracle, and Google continue to expand their base with the opening of cloud regions in the APAC region and a strong physical presence in China, Singapore, Australia, and India.
These cloud service providers are the major adopters of high-density, mission-critical servers, storage infrastructure, and network infrastructure.
The region is also witnessing a massive increase in data usage by consumers through services offered by companies in the e-commerce, social media, and entertainment industries.
Digital services offered by the BFSI and government sectors are also key enablers for data growth in the APAC data centre market.
ResearchandMarkets also highlighted Market Opportunities and Trends, as well as the Growth enables and restraints.
Market Opportunities and Trends
- 5G On Edge Data Cente Investments
- Growing Procurement Of Renewable Energy
- Innovative Data Centre Technologies
- AI Enhances Liquid Immersion & Direct-To-Chip Cooling Adoption
- Emergence Of Lithium-Ion To Replace VRLA Batteries In Data Centres
- Automation Of Data Centre Infrastructure
- higher Adoption Of 200/400 GBE Switch Ports
- NVME To Dominate In Flash Deployment
Market Growth Enablers
- COVID-19 Effect On APAC Data Centres
- Increasing Colocation Investment
- Growing Construction Of Hyperscale Data Centres
- Cloud Adoption Driving Data Centre Market
- M&A & Joint Ventures To Increase Data Centre Growth In APAC
- Increase In AI & ML Workloads In APAC Data Centres
- Tax Incentives and Area Allocation To Increase Data Centre Deployment
- Increase In Deployment Of Submarine Cables
- Rise In Power & Network Outages
- Security Challenges In Data Centres
- Location Constraints For Data Centre Construction