BroadGroup: Change Ahead for South East Asia Data Centers as Markets Shift Gear

According to a new report by BroadGroup, another round of substantial growth is afoot for data centers in the South East Asian region over the next 24 months. This will result in a market size conservatively estimated at $3.4 billion by the end of 2017. The new Broad Group report, Data Center – South East Asia, also finds clear signs of shift and change ahead that will alter the competitive landscape.

Half of the total South East Asia data center market now exists outside of Singapore with a forecast – based on countries covered in the report:  Brunei, Indonesia, Malaysia, Singapore, Thailand and newcomer Vietnam – that it will collectively exceed 1 million m2 of data center floor space for the first time by the end of this year.

There is complexity in the different tempo and evolution of each market. Singapore still remains an epicenter of cloud and data center activity with a market size exceeding that of the UK (Europe’s largest) and still adding more capacity, before the close of the year.

cloud-hosting-singaporeAggressive growth plans in Indonesia (more than half the total population of the region) for space and power, and the readiness and early success of Iskandar across the border from Singapore, propose new alternative data center locations.

To the north, Bangkok and nearby areas will see significant growth from its current low base and has the potential to expand into the economies of the Greater Mekong region. At least 8 new development zones across South East Asia were identified in the report typically supported by government initiatives.

Research for the report which covers 131 operators and 236 data center facilities, suggests that at least $1.2 billion of new investment is planned over the next 2 years. This figure excludes any future enterprise investments.

“We see the emergence of a changing pattern in the deployment of IT assets in South East Asia and areas such as Iskandar – the largest development zone so far,” said John Vather, Social Media & Research Manager, Broad Group. “It will compete with the Pearl River Delta, or Greater China economies rather than other cities or digital parks in the region and also provide a possible shift away from the traditional tier 1 city axis used by enterprise investors so far.”

However, the report warns that dependencies such as the fulfillment of current investment plans, and new initiatives to resolve power and connectivity challenges still remain critical to the success of forecast growth across the South East Asia region to the end of 2017. The report also suggests opening private investment in dark fiber installation would accelerate development.

Overall, the new BroadGroup report would offer a detailed and comprehensive study of the data center market, power availability and cost, pricing, and forecasts in South East Asia as it enters the next stage of growth.