The region is set to house the densest clusters of sustainable data centers in the world, fueled by post-pandemic digitalization needs.

Southeast Asia is projected to be the fastest-growing region for data centers, according to a white paper by Digital Realty and Eco-Business, with 89% of regional experts surveyed expecting significant data usage growth in the region over the next five years. 

Over the past few years, the region has experienced exponential growth in data demand. Enterprises are expanding rapidly within the region, driving demand for robust regional IT infrastructure. In a survey of more than 200 experts across Singapore, Malaysia and Indonesia conducted from May through July 2020, 96% of respondents indicated that COVID-19 has further intensified data demand and underscored the importance of digital technology and data centers. 

These findings coincide with the Data Gravity Index that measured, quantified, and determined the implications of the explosion of enterprise data. Data Gravity is expected to more-than-double annually from 2020-2024, with the Asia Pacific region expected to generate the fastest growth in the intensity of data gravity across all regions, while Singapore is expected to be the fastest-growing market across the 21 global metros analyzed. 

Sustainability issues
In the joint study, respondents highlighted key challenges to making data centers more sustainable: a lack of environmental awareness (71%), lack of investment (65%) and lack of collaboration from stakeholders (61%).

Southeast Asia’s tropical climate and policy gaps were also noted as additional impediments to the region’s long-term growth as a competitive and sustainable data center market. For Singapore, it has the added constraint of limited land area. 

Said Mark Smith, Managing Director (Asia Pacific), Digital Realty: “Southeast Asia has emerged as a highly sought-after region, with Singapore accounting for an estimated 60% of the region’s total data center supply. While Singapore’s stable, pro-business environment, low-risk geographic features and abundant connectivity options make it an attractive destination for data center players, the country needs to remain competitive in the face of rising competition. Singapore has a tremendous opportunity to fortify its regional leadership and build upon its position as a sustainable global data center hub in the post-pandemic world.” 

Eco-business’s Managing Director Jessica Cheam commented: “Southeast Asia is home to some of the fastest-growing economies in the world, and its rapid development will accelerate the demand for data services. Against this backdrop, it is crucial that data center providers find a way to meet this need while ensuring they are playing a part in helping countries meet their climate targets.” 

Two rising stars
The study emphasized that cooling needs represent 35%-40% of total data center energy demand. Energy-efficient cooling technologies and processes, including liquid cooling, represent a significant opportunity for data center operators to reduce energy usage as well as costs. 

According to Digital Realty’s Senior Director of Sustainability, Aaron Binkley: “It is encouraging to see that most customers in the region view sustainability as a key consideration when choosing a data center provider. This aligns with our position on sustainability and our commitment to bringing our emissions in line with a significantly-below two-degree climate change scenario by 2030. We believe cooling technology will be a game-changer for data centers, especially in Southeast Asia’s tropical climate.” 

The new report also identified Indonesia and Malaysia as rapidly developing rising stars that are expected to expand their share of the region’s data center pie. Both countries offer ease of access and a lower cost of entry than Singapore. They also have a young, fast-growing, and sizable base of digital and tech-savvy consumers, which drives a dynamic e-commerce and technology industry and escalating data storage needs. 

In terms of sustainable growth potential, both countries have an abundance of land mass for data center operations to expand, which gives them the physical capabilities to generate their own supply of renewable energy.  

“We hope this white paper will spark conversations in the region and spur further action among business, government and wider society to achieve the common goal of creating thriving digital economies while ensuring a resilient and sustainable future,” said Cheam.