To meet Asia Pacific’s demand for open, trusted, sovereign and sustainable cloud solutions, data center operators have had to adapt and innovate.
Demand for data center solutions in Asia Pacific has soared as businesses here scale digital transformation efforts with cloud adoption. However, there are also growing challenges in navigating data sovereignty and environmental concerns.
Digitally transforming organizations and data center operators in the region have to work together to meet these challenges. DigiconAsia finds out from Terry Maiolo, Vice President and General Manager, APAC, OVHcloud, how these concerns are being addressed.
How has cloud adoption in Asia Pacific evolved in recent years? What are the key changes?
Maiolo: The past few years have seen exponential growth in cloud investment by organizations in APAC, with spending anticipated to reach US$200 billion by 2024.
The growth can in some ways be attributed to pandemic and post-pandemic factors that have prompted businesses to embrace digital technologies in pursuit of greater efficiency, agility, streamlined operational costs, resource optimisation, and support for hybrid working. Larger trends in the tech world have also been a major factor here, with 5G-driven Internet of Things (IoT), Artificial Intelligence/Machine Learning (AI/ML), the rise of the metaverse, and Web 3.0 applications all driving growth in the cloud market.
Today, cloud services have become central to any forward-looking business strategy. The cloud offers numerous advantages, including data storage but also the ability to derive valuable, real-time data-informed insights. It also provides organizations with the flexibility to scale business operations and offers remote access to employees. Consequently, many start-ups and businesses of all sizes have embarked on their cloud adoption journeys.
While Software-as-a-Service (SaaS) and Infrastructure-as-a-Service (IaaS) have long dominated the cloud market in spending, PaaS solutions have been on the rise, demonstrating an explosive 39.1% YoY growth since 2020. Businesses are embracing PaaS solutions as they advance towards in-house application development for better control over the ‘time-to-market’ applications in the competitive landscape. This shift towards PaaS also indicates a key change in the evolution of cloud adoption in the Asia Pacific region.
With the confluence of data sovereignty and environmental concerns surfacing at the top of organizations’ agenda, what is the impact on business transformation and cloud strategies?
Maiolo: While market drivers are certainly fuelling cloud adoption in the region, this can be complex for businesses given the increased regulatory scrutiny over data protection and privacy concerns, as well as the concerted push to minimize carbon emissions in line with national sustainability targets. After all, while governments have been keen to tap opportunities to grow their respective digital economies, they are also cognizant of the perils of unprotected consumer data and the impact that growing reliance on digital technologies can have on the environment when left unregulated.
On the data sovereignty front, the European General Data Protection Regulation (GDPR) has long set the standard on data protection. In recent years, more and more countries in Asia Pacific have also enacted local iterations of data protection legislations that have pushed businesses to adopt increasingly localized approaches to data storage and processing in order to remain compliant while maintaining multi-country operations. While some key markets like Singapore have yet to specify data localization practices by sectors, others like Indonesia and Vietnam already have mandates in place that necessitate local data storage for financial and public sector data, as well as foreign technology and telecommunications businesses respectively.
It is hardly surprising that this has motivated greater reliance on hybrid cloud solutions – businesses can choose the applications and data they need to deploy to off-premises cloud environments, while also maintaining compliance and security with highly sensitive data that needs to be stored on-premise.
On the other hand, the reality is that data centers do have a considerable impact on the environment in contributing to up to 5% of global carbon emissions. With the region doubling down on net-zero ambitions, businesses cannot escape the inevitable: they need greener and more sustainable cloud solutions that are aligned with lowering their overall carbon footprint.
It is in this regard that growingly rigorous environmental regulations as well as data protection policies have created an inflection point in the cloud market – there was already ample demand for open, reversible cloud solutions with digital transformation, but sustainability is now also a key consideration for businesses’ cloud strategies.
How is OVHcloud’s APAC expansion addressing the above challenges and opportunities?
Maiolo: In line with our strategic plan to enable accelerating digital growth globally with 15 new international sites by 2024, our expansion in Asia Pacific started with the recent addition of a data center in India and will see the deployment of two more sites in Australia and Singapore by next year.
As businesses look at cloud adoption and international expansion, we recognize that they are faced with the challenges of data protection and compliance. Addressing increasing demands for local data residency, our data centers across the region offer businesses enhanced support through local compute and storage capabilities to meet evolving data compliance needs.
Operating in compliance with the GDPR, our trusted cloud services also guarantee data sovereignty and ensure immunity to extra-territorial regulations while protecting the data in compliance with local data regulations. With 34 data centers worldwide, we provide a multi-local approach, offering an alternative and more secure option for businesses.
On the sustainability front, our new data center deployment in India, and in Australia and Singapore by next year, aim to further reduce their environmental impact by tapping on our water-cooling technology that has been refined over two decades and adapting our infrastructure to meet tropical conditions.
Through innovation and technology, we have reached best-in-class sustainability metrics with a PUE (Power Usage Effectiveness) at 1.28 and a WUE (Water Usage Effectiveness) of 0.26. By manufacturing our own servers, which are later disassembled and recycled for a second life, our integrated industrial model and circular approach lets us control our value chain and optimize components’ lifespan, with a CUE (Carbon Usage Effectiveness) at 0.2.
Ultimately, there is certain and clear demand for greener data centers that can sustainably fuel the momentum of businesses’ digital transformation here, while also enabling low latency data transfers that will aid business competitiveness especially as expectations for real-time digital interactions increases. After all, the region is already one of the fastest growing markets for data centers.
