Enterprise data projected to gravitate towards APAC by 2025

This is the formula that led to the prediction: DM x DA x BW / L².

According to the World Economic Forum, Industry 4.0 has the potential to create US$3.7 trillion in value by 2025, taking into account the recent pandemic-driven digitalization trends.

At the heel of this prediction is another study that points to the Asia-Pacific region (APAC) becoming a prominent enterprise data powerhouse with the highest compounded annual growth rate of 153% by 2024.

Data center solutions provider Digital Realty has released findings that show 80% of data worldwide will reside in enterprises by 2025. In addition, APAC is forecasted to account for close to 30% of the data centre space globally by 2023 due to increasing demand for cloud services and digitalization from investors and enterprises.

Out of the list of top six Data Gravity Index leaders, four are from APAC. Singapore is in first place with 200% CAGR through 2024, followed by Hong Kong in second place (177% CAGR), Sydney in fourth position (159% CAGR) and Tokyo as the last (155% CAGR). North America and the Europe, Middle East and Africa (EMEA) regions are predicted to have 137% and 133% CAGR respectively. 

The Data Gravity Index measures the creation, aggregation and private exchange of enterprise data across 21 metropolitan countries. The concept hinges on the observation that places with strong global connectivity and an abundance of data-led industries (such as a thriving technology scene or prominent financial services sector) create so much enterprise data that they produce a ‘Data Gravity’ effect, exponentially attracting more data to the region.

Measured in gigabytes per second, Data Gravity Intensity is expected to grow by a CAGR of 139% globally. This comes at the back of data stewardship driving global enterprises to increase their digital infrastructure capacity to aggregate, store and manage the majority of the world’s data.

APAC’s data lead

According to the study, countries in APAC with sizeable industrial bases kickstarted their Industry 4.0 initiatives rather early compared to other markets. This has allowed them to dive deeper into establishing institutional frameworks to support the scalability of Industry 4.0, rather than cover the surface on creating awareness on new technologies (e.g., China’s 2016-2020 plan to digitalize 10 of its priority traditional manufacturing sectors.) 

Mark Smith, Digital Realty’s Managing Director (Asia Pacific) commented: “APAC is home to some of the leading business and data hubs spearheading the adoption of advanced technologies including 5G, AI and IoT in the world. Singapore’s recognition in the Digital Gravity index reaffirms our decision to invest in the country—we are due to open our third co-location facility in Singapore early next year. Likewise, Hong Kong, Sydney and Tokyo which are key markets for us are ranked highly on the index. These cities are proven international financial and business hubs, providing rich gateways for global enterprises to connect to various parts of the world.”

According to the study, besides the abundance of enterprise data, the flow of data between APAC cities also offers a great advantage. APAC is home to many of the world’s most-interconnected city pairings. This can be attributed to the regulatory ease of doing business with one another, as well as the cities’ thriving financial and manufacturing centres. These include Tokyo and Hong Kong as well as Beijing and Shanghai. 

The problem of too much unused data

The study notes that many businesses are accruing increasing amounts of enterprise data in a bid to transform their businesses, but are overwhelmed by the sheer data volume that weighs down digital transformation efforts instead.

As a whole Forbes Global 2000 Enterprises will have accrued enough data by 2024 to need access to quantum computing to effectively handle it. They will need an additional 325 exaFLOPs (6 exaFLOPs per business) of compute power and 124 exabytes of private data storage to effectively manage their enterprise data, said the study.

Comparatively, IBM’s next quantum computer will run at just 1.5 exaFLOPs by 2021.

These unmanageable volumes of enterprise data and the gravity they create are already resulting in issues for businesses beyond the IT department, including:

• Limited innovation: inability to process enterprise data effectively will hold back technological advances.
• Poor customer and employee experiences: too much enterprise data being produced will result in ineffective management of data, possibly leading to a negative customer experience.
• Increased costs: more enterprise data being produced will mean more capital needs to be invested to capture, manage and process it.
• Compliance issues: overabundance of enterprise data may result in organizational challenges when it comes to dealing with regulatory and compliance-related issues.
• Security: an abundance of non-visible data gives bad actors more attack surfaces.

“Understanding the importance of data gravity helps enterprises understand what’s required to enhance their business architectures and management of enterprise data. This can lead to better enterprise workflow performance, better security and cost-savings in the long run as data continues to be the digital economy’s currency,” added Smith.