APAC datacentre market sees steady growth

Report shows investment opportunities

The Asia Pacific datacentre market is expected to grow at a compound annual growth of over 3 per cent during the period 2019-2025.

A report from Research and Markets shows the APAC datacentre market is witnessing steady growth with continued investments from hyperscale and cloud service providers.

In 2019, China and Hong Kong led the market in terms of datacentre development, followed by India, Australia, Japan, and Singapore.

Apart from these countries, Indonesia, Thailand, and Malaysia made a sizable contribution toward growth. The implementation of 5G has commenced in several countries, which will have a significant impact on the market with telecommunication providers partnering with service providers in establishing edge datacentres throughout the forecast period.

The market is also witnessing significant investments in submarine cable projects from telecommunication service providers, and government entities with hyperscale operates are continuing to invest millions in improving submarine connectivity across regions aiding in the growth.

The introduction of artificial intelligence and machine learning workloads is expected to contribute over 40 per cent in the infrastructure investment in APAC by 2025.

Artificial intelligence and machine learning workloads will increase the demand for liquid-immersion and direct-to-chip cooling techniques that can support the density of up to 200 kW. Over 30 per cent of Australian enterprises are involved in the use of AI-based infrastructure solutions as experimental as well as production workloads.

The average size of a facility in the APAC region has increased considerably in the last two years. Several operators are involved in land acquisitions for future development, which, in turn, is propelling growth. ODM infrastructure solutions and all-flash storage arrays contribution to the market will continue to grow.

“Data Center Market in APAC – Industry Outlook and Forecast 2020-2025” report shows the adoption of IoT, artificial intelligence, and big data analytics, the demand for high-performance computing infrastructure is increasing.

The demand for supercomputers is also increasing with the adoption increase in investment towards cryptocurrency mining. The increasing development of facilities in China and Hong Kong and the implementation of a high-speed 5G network will boost the datacentre network market.

Over 50 per cent of the business IT budget is spent on the migration to cloud-based services in Australia, with IaaS spending leading the chart followed by SaaS. The Australian market will also witness the increased demand for managed datacentre services. IT infrastructure spending will be dominated by cloud-service providers.

The increasing adoption of IT infrastructure is a major driver in the datacentre market in India, with high adoption of servers, storage, and networking infrastructure. Around 70 per cent of start-ups in India are adopting IoT in their business.

Healthcare and manufacturing are popular verticals attracting a lot of investor interests. The IT Infrastructure market in Japan is gaining traction with the increasing popularity of cloud-based services, IoT, and AI.

In Japan, most facilities are having blade types of servers developed for the high-density computing environment. The increasing usage of social media platform in the region will lead to the development of new facilities to store data, which increase the demand for high-capacity storage solutions.

The construction of datacentres with power capacity over 20 MW will increase the demand for high-capacity electrical infrastructure. Most facilities support rack power density of 510 kW; however, it is expected that new facilities will support a capacity of up to 20 kW during the forecast period. Multiple facilities with a power capacity of more than 10 MW are being implemented in Australia. Datacentre providers are investing in DRUPS systems with a capacity of around 1,500 kVA.

Service providers are featuring lithium-ion batteries, which are likely to increase adoption in the market. The market in India has witnessed the installation of energy-efficient power infrastructure. The contribution of the power infrastructure segment is high because of the growth in the installation of 2N power infrastructure solutions among extensive facilities. The operators are also being prompted to support renewable energy sources to power their IT infrastructure.

Several APAC countries do not support the use of free cooling systems. The operators in this region are still highly dependent on traditional air-based cooling techniques in small facilities that are built as part of commercial complexes.

The use of dual water feeds in datacentres with on-site water treatment plants is fast gaining popularity in the region as a few countries such as India suffer from acute water shortage for cooling purposes. The increasing demand for ASHRAE and Uptime Institute certified infrastructure is likely to increase the importance of metrics such as power usage effectiveness, water-usage effectiveness, and carbon usage effectiveness during the forecast period.

The use of air-based cooling will continue to co-exist in the APAC region because of the growth of small facilities.

China is leading in greenfield construction and will be more likely to have brownfield developments in Hong Kong due to the space shortage during the forecast period. In terms of physical security, most service providers prefer four layers of safety, with a few engaging in the implementation of five-layer ones due to the increasing demand for colocation services.

Australia is witnessing an increase in the construction of greenfield datacentre projects. Perth, Canberra, Brisbane, and Sydney are some of the major cities in Australia, where greenfield development is likely to increase.

The need for DCIM software to monitor facilities will continue to grow as the need to improve operational efficiency is growing. The general construction market will witness an increased construction of datacentres in Japan. However, the cost of developing new facilities in the country is high. The rest of the APAC market will witness the entry of new construction services providers with greenfield construction growing. Telecommunication service providers and government agencies are the major investors in Southeast countries.

Multiple facilities are being developed in this region as part of commercial buildings in major cities. This scenario will change in the future years as more standalone datacentre developments will be witnessed in regions such as Southeast Asia, India, and Rest of APAC during the forecast period. However, with the increase in greenfield development, the need for skilled labour will also grow.

The labour shortage is not higher in APAC countries than in European and American regions. Mega datacentre development will provide a major boost to the revenue growth for local construction contractors and suppliers.

In the APAC region, several under-developed projects fall under the Tier III category. This trend is likely to continue during the forecast period, with many operators expected to move to the Tier IV category based on the growth in rack power density and critical applications.

Datacentres in Japan are likely to adopt the Uptime Institute’s Tier III or Tier IV design with a minimum of N+N redundancy across infrastructures. Most facilities developed were Tier III and Tier IV standards in 2019.

The deployment of datacentres in China and Hong Kong is likely to exceed supply due to the increasing demand for cloud-based services, big data analytics, and IoT. China is the world’s largest IoT market, with 64 per cent of the 1.5 billion global cellular connections.

Hong Kong is witnessing investments year-on-year growth in the market, which is aiding the country to emerge as one of the major datacentre hubs in the world. The submarine cable deployment in Australia will boost facility growth.

In 2019, submarine fibre cable projects were INDIGO-Central and INDIGO-West, which connect Australia, Indonesia, and Singapore will contribute to the increase in network traffic.

The datacentre market in India is one of the fastest-growing in the APAC region. India witnessed continuous investment in cloud adoption and big data analytics from small and medium-sized industries in 2019.

Government initiatives such as Digital India are the major contributor to the datacentre investment growth in the market.

The market has also witnessed an increase in the number of new service providers offering hosting, storage, colocation services, and disaster recovery services.


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