The region’s data center industry grew strongly between 2018 and 2023. What opportunities and implications lay in the numbers?
As governments embrace digital transformation initiatives, regulatory frameworks have been evolving to accommodate this influx, shaping the landscape for eco-friendly, low carbon-emission data storage and processing.
In the Asia Pacific region (APAC), data center (DC) growth over the past five years has been second only to that in the United States, according to James Murphy, Managing Director (APAC), DC Byte, in an interview with DigiconAsia.net.
What can stakeholders in this region’s industry expect for the next five years? Let us find out…
DigiconAsia: Other than the obvious pandemic-linked phenomena, what are the reasons you think led to the strong DC industry growth in APAC in the past few years?
James Murphy (JM): I think there are two key reasons behind this exceptional growth:
● Fueled by economic development, countries in South-east and South Asia were experiencing a surge in internet usage and digital transformation. This translated into high demand for data center capacity.
● Compared to established markets, these regions initially had a smaller data center footprint. So the low base led to a steeper growth curve as they built out their digital infrastructure.
For comparison, the Americas still have the largest data center market, and the DC industry in the Europe, Middle East and Africa region (EMEA) has been s steadily growing despite challenges like power availability and regulations. EMEA and the USA are expected to keep relying on data centers for innovation, while APAC has more room to grow as it builds its infrastructure.
Although APAC’s DC industry growth may slow down later, it shows promise with investments in untapped markets.
DigiconAsia: Can you explain the differences in data center markets across regions?
JM: APAC’s DC industry has been experiencing significant growth in Live Supply (defined as “determined IT power that is operational whether it is let out or not”) and Early-Stage development (defined as “the IT Load that has been announced or speculated, but has yet to secure all of the required elements for development” and considered to be of uncertain development potential), driven by new investments and a smaller existing market compared to other regions.
The region is expected to become a strong contender in Live Supply within the next five years.
On the other hand, the DC industry in the United States leads in global Live Supply due to the dominance of Northern Virginia. The region is expected to maintain this lead.
Finally, the DC market in EMEA has grown less strongly in Live Supply but leads in planned data centers. Europe drives growth, with the Middle East and Africa also experiencing an uptick — suggesting accelerated growth in Live Supply in the future.
DigiconAsia: What implications and opportunities do you read in to the APAC DC industry statistics?
JM: The booming data center market in APAC presents both exciting opportunities and unique budgeting considerations for organizations’ data center projects. Here are some key insights to keep in mind:
- The DC industry’s strong growth in APAC signifies a rapidly growing market. This translates to high demand for data center resources, potentially driving up construction and equipment costs in the short term.
- Compared to the established DC market in the US, a number of developing APAC markets are still building infrastructure. Land and construction may be initially cheaper in some of these developing APAC markets. Factor-in potential costs for upgrading power grids or telecommunications infrastructure, which may be less developed in certain areas.
- Underserved markets within APAC offer significant potential. However, investments in power and telecoms infrastructures will likely be required. Consider factoring-in these additional costs when budgeting for data center deployments in these regions. Energy efficiency is a growing concern due to rising energy costs. Prioritize energy-saving technologies and operational practices to minimize long-term operational expenses.
DigiconAsia: What key recommendations would you offer to help businesses succeed in the evolving data center landscape?
JM: For players in the DC industry, consider power availability and sustainability when choosing data center locations; invest in smaller, efficient data centers to accommodate evolving computing needs; form partnerships to enhance capabilities; and address emerging challenges and continuously monitor trends and regulatory changes to remain competitive in the evolving landscape.
Keeping sustainability foremost in mind, also consider the following:
- Utilize edge services for faster data processing
- Build strategic partnerships and acquisitions
- Track the increasing demand for AI-driven applications in order to meet increasing demands for data center services
- Invest in green data centers to achieve long-term cost savings, meet or exceed regulatory compliance, and ultimately, benefit the environment
DigiconAsia thanks James for sharing his data center industry report insights with readers.
