Digitalization to Fuel the Growth of Data Centers in APAC Region - Arizton

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Oct 04, 2021, 13:00 ET

CHICAGO, Oct. 4, 2021 /PRNewswire/ -- The data center market in APAC is growing significantly, with multiple investments in Japan, Australia, Malaysia, Vietnam, Cambodia, and Singapore. APAC region is among the fastest-growing digital markets worldwide. Internet usage and social media trends have increased the demand for faster internet networks and data centers to store data generated by them. Internet penetration is one of the strongest drivers for the APAC data center market. Moreover, social media usage among consumers and digital transformation by enterprises across industry verticals are other major factors promoting data center growth.

Observing these rapid and drastic changes in demand and supply patterns encouraged the industry analysts at Arizton to publish exhaustive and data-driven insights on these current trends in the industry. Arizton has a dedicated vertical that focuses on data centre knowledge base across geographies. These market research reports cover a detailed analysis of the COVID-19-induced supply chain disruptions, innovations in technology, equipment financing, economic impact, and a detailed study of the competitive landscape.

Japan Data Center Market - Investment Analysis and Growth Opportunities 2021-2026

Japan data center market is projected to reach USD 10.22 billion in 2026, growing at a CAGR of 6.79% during the period 2020-2026.

Japan is a mature data center market in APAC and has a strong presence as a corporate hub and global financial center. Other than being economically forward, it is also a leader in technology, robotics, and machine learning. The country hosts around 22 third-part data center service providers operating over 93 facilities. Additionally, the country also includes several on-premise or dedicated data centers owned by local enterprises. Japan is one of the major connectivity hubs owing to its strategic location. The COVID-19 pandemic has been a strong market enabler for several digitization initiatives across Japan.

Key Highlights

The cloud market in Japan was valued at USD 10 billion in 2020, including private and public cloud, and is expected to be valued at around USD 15-16 billion by 2023. The rise in cloud adoption is expected to propel the data center market demand in Japan.
MC Digital Realty was the major contributor in terms of investment, with the development of two colocation facilities in 2020, followed by NEC and Colt Data Centre Service.
Tier III is the most adopted facility in Japan. Over 80% of recent data centers built between January 2020 and June 2021 are built according to Tier III standards.
As the price of SSDs is declining, the adoption of all-flash and hybrid arrays will grow with cloud data center deployments in Japan. Growing investments in start-ups such as FinTech and e-commerce using big data analytics and IoT applications are expected to increase the demand for all-flash storage.
Tokyo is currently the prime location for data center investment across Japan, with more than 35 data center facilities. MC Digital Realty, Colt Data Centre Services, Equinix & GIC, and KDDI were the major data center investors in Tokyo in 2020.

Australia Data Center Market - Investment Analysis and Growth Opportunities 2021-2026

Australia data center market is projected to reach USD 7,397 million in 2026, growing at a CAGR of 6.43% during the period 2020-2026.

Australia is among the mature data center markets in the APAC region. The data center market includes about 41 unique third-party data center service providers, operating about 112 facilities. Additionally, the country also includes several on-premises or dedicated data centers owned by local enterprises. Over the past 5-7 years, the market has grown significantly with an increase in the development of hyperscale data centers. The COVID-19 pandemic has been a strong market enabler for digital transformation initiatives across private as well as public sector enterprises in Australia.

Key Highlights

In 2020, due to the COVID-19 pandemic, the Australian cloud service market grew by over 15%, rendering around USD 10 billion in revenue.
M&A activities continue in the Australia data center market. In April 2020, Macquarie Infrastructure and Real Assets (MIRA) acquired 88% stake in AirTrunk (USD 1.8 billion).
Australia witnessed an investment of over USD 1.2 billion on data center facilities opened and under construction from January 2020 to June 2021.
Sydney, home to major ICT companies and leading startup ecosystem in the country, is a pivotal city for data center investments in Australia. In 2020, Sydney was home to over 30 colocation data center facilities.
Renewable energy initiatives are being undertaken by colocation providers. For instance, in 2018, Equinix installed solar panels on the roofs of its Australian facilities. These solar panels are likely to power up to 10% power capacity of the facilities.
In 2020, around 70% of data center deployment fell under the Tier III category. Most new data centers are designed to be of Tier III standards with a minimum of N+1 redundancy and can be reconfigured with up to 2N+2 redundancy as the need arises.

Singapore Data Center Market - Investment Analysis and Growth Opportunities 2021-2026

Singapore data center market is projected to reach USD 4.71 billion in 2026, growing at a CAGR of 8.16% during the period 2020-2026.

Singapore is among the mature data center markets in the Southeast Asia region. The data center market includes about 23 unique third-party data center service providers, operating over 38 facilities. Additionally, the country also has several on-premise or dedicated data centers owned by local enterprises. Over the past 2–4 years, the market has grown significantly with an increase in the development of hyperscale data centers. About 5 facilities have witnessed investments in the country, which are expected to be operational in the next 2–3 years. The COVID-19 pandemic has been a strong market enabler for digital transformation and initiated remote working amongst working population.

Key Highlights

AWS is building its first renewable power project in Singapore, a solar project with a series of solar panels mounted on a ground system, to generate over 60 MW of power and the project will be operational in 2022.
In 2020, several telecom operators in Singapore deployed 5G, boosting edge data centers, especially in Tier II and Tier III cities with increased usage and demand.
In 2020, Keppel Data Centres, ST Telemedia Global Data Centres, AirTrunk Operating, Digital Realty, Equinix, and Iron Mountain invested in the Singapore data center market.
The average rack power density in Singapore in 2020 was around 6–8 kW, with some data centers developed to support a rack power density of up to 20 kW.
Vertiv has identified that data center operators in Singapore, estimating 21% of their data center operations to be powered using solar and wind energy by 2025.

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