Emergence of a new business environment, cloud service providers and video conferencing service providers.
The APAC data centre market share has been witnessing exceptional growth since the outbreak of the COVID-19 pandemic, which has increased the access to internet-related services aided by lockdowns and restrictions imposed by government agencies across the region.
A recently published report by ResearchAndMarkets.com found colocation service providers witnessed a strong uptake of data centre spaces by existing customers owing to the growth in demand during the pandemic.
Due to the emergence of a new business environment, cloud service providers and video conferencing service providers have significantly contributed toward colocation and data centre services. In Japan, the data centre construction witnessed no impact due to the pandemic, however, data centre operators implemented stringent precautionary regulations for the safety of their employees.
Similarly, in India, a country-wide lockdown lasted for around 60 days with a majority of operations performed via online and remote mediums, which increased internet users by 25%. Hence, the market witnessed a strong spike in the announcement of new projects across India, China, Malaysia, and Japan in Q3 2020.
APAC Data Centre Market Segmentation
The adoption of blade type servers is set to grow in China and Hong Kong. Over 90% of data centres in China have adopted blade servers for the high-density computing environment. The demand for supercomputers is also increasing with the adoption of digital currency in these countries. The IT infrastructure spending in Australia will be dominated by cloud-service providers, followed by enterprises, involving self-managed IT infrastructure solutions.
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. In India, a rise in the cloud, big data, IoT, and artificial intelligence technology by enterprises is a major driver for the IT infrastructure market. Around 70 per cent of start-ups in India are adopting IoT technology, with healthcare and manufacturing segments attracting the highest investment.
Megaprojects in China and Hong Kong data centre market are designed to be of Tier III and Tier IV standards, which are leading to a high deployment of 2N redundant UPS systems. Multiple data centre facilities with a power capacity of more than 10 MW are implemented in Australia, which is increasing the adoption of over 500 kVA capacity UPS systems.
DRUPS systems are majorly adopted in the country. The demand for modular data centre facilities deployed in Southeast Asian countries is high. The procurement of lithium-ion UPS is expected to grow in the region to avoid high OPEX on VRLA systems. The data centre development is likely to be of higher capacity, typically over 5 MW, requiring the adoption of 2N redundant backup systems owing to challenges related to power fluctuations and outages.
In China and Hong Kong, a majority of data centres adopt a combination of air and water-based cooling techniques to cool down facilities. However, a few facilities are built to support free cooling techniques. Data centres in India mainly use air-based and few facilities operate using water-based cooling systems. However, data centres are not completely suitable for free cooling. Few states in the country support free cooling of up to 1,000 hours annually.
High air pollution levels in major cities across India could make free cooling an unfeasible option for operators. Most high-density environments are likely to consider water-based cooling systems, while small-scale deployments could operate through air-based cooling systems in the country.
A majority of data centres in Singapore are designed to adopt water-based cooling techniques. The growth of data centre construction market in APAC will aid in the development of facilities that would comprise multiple chillers, cooling towers, and CRAH units with N+N redundant configuration.
In terms of general construction, China leads greenfield construction. Hong Kong is expected to witness largely brownfield developments due to the space shortage during the forecast period. A majority of the construction contractors are located in these countries. The increased interest to improve efficiency and reduce OPEX is driving data centre operators to procure intelligent DCIM solutions for end-to-end monitoring of facilities in India.
Most data centres developed in Malaysia during the forecast period are expected to be greenfield. The market also has a strong potential for growth among modular data centre projects. The labor cost in Malaysia is cheaper than in Singapore. However, the availability of a skilled workforce will be a major challenge among providers.
In the APAC region, several under-developed projects fall under the Tier III category, and the trend is expected to continue during the forecast period, with several operators likely to shift to the Tier IV category. In terms of colocation, these facilities will cost higher per rack basis than Tier I and Tier II facilities. Most new data centres are designed as Tier III standards with a minimum of N+1 redundancy.
Tier IV data centres are equipped with minimum 2N+1 redundancy in every infrastructure that makes the facility fault-tolerant, with some facilities having 2N+2 redundancy of infrastructures such as UPS systems and PDUs. Facebook, Apple, Microsoft, and Google are the major contributors to Tier IV data centres. These facilities generate more revenue for the APAC data centre market, with focused investment on highly efficient cooling systems.
Insights by vendors
AWS, Microsoft, Alibaba, Tencent, IBM, Oracle, and Google continue to expand their base with the opening of cloud regions in the APAC region and a strong physical presence in China, Singapore, Australia, and India.
These cloud service providers are the major adopters of high-density, mission-critical servers, storage infrastructure, and network infrastructure. The region is witnessing a massive increase in data usage by consumers through services offered by companies in the e-commerce, social media, and entertainment industries.
Digital services offered by the BFSI and government sectors are also key enablers for data growth in the APAC data centre market.