Carbon Tax Pressures Singapore Data Centers

Carbon Tax Pressures Singapore Data Centers

Businesses across Singapore will have to contend with a new threat to their profitability in the future: the carbon tax which will be imposed in 2019. Announced by the Finance Minister Heng Swee Keat in February 2018, the carbon tax will be levied on all factories and establishments that release more than 25,000 tons of greenhouse gases.

Data centers have been springing up at an accelerated rate since the rise of Internet and Cloud based companies and with companies storing billions of gigabytes of information. In Singapore, the rise in demand has been matched with a rise in supply, and what we see today is a competitive market with both international and homegrown data center providers.

Essentially, data centers consume an immense amount of energy, especially with technologies today enabling higher density in IT equipment. It is predicted that data centers will consume three times the energy that they do today in the next few years.

With the carbon tax levy set at $5 for every ton of greenhouse gas released by companies from 2019 to 2023, we take a look at how this will generously impact the competitive data center business.

The Impact on Businesses

It is easy to assume that data center providers will probably pass on the costs to the end-users. However, this would not be sustainable in the long-term, given the competitive nature of the market that extend beyond the country and into the region. Outside of Singapore, countries such as Japan and Hong Kong have also been deemed as a preferred data center hub for global end-users to set up in Asia.

Companies generally prefer data centers located nearby to allow for quick movement of data, and greater control with better accessibility. Along with significantly lower costs and improved digital infrastructure since the past few years, Malaysia could also be a convenient alternative location to look at.

With that in mind, data centers in Singapore need to look into improving their energy efficiency to reduce their operating expenditure, avoid costly tax payments, and ultimately remain competitive in the Asian region. A significant amount of energy is consumed in running a data center, with almost 37% being used to keep the equipment cool. While it is a big challenge, there is definitely room to achieve optimal energy efficiency.

A Green Data Center – Distant Dream or a Real Possibility?

Currently, the best-in-class data center in Singapore has a power usage effectiveness rating of 1.44 whereas a similar data center in Nevada can achieve an annual PUE rating of 1.185. Singapore’s Infocomm Media Development Authority (IMDA), Keppel Data Centers, and Huawei have joined hands to see if they can create a high-rise “green data center” to solve both space and power concerns. This includes exploring at elements such as server rack positioning, intelligent control systems, data hall structures, and the use of natural ventilation or physics-based cooling methods for more efficient energy consumption. The IMDA has also designed the Green Data Center Standard to establish processes and systems required to improve energy efficiency in typical data centers.

Renewable energy is limited in Singapore. In an energy-intensive facility such as a data center, relying solely on renewable technology is not a suitable option. Tropical and humid climates are not conducive to many of the energy-saving techniques as well, which means data center businesses have to be inventive. The industry must innovate in different ways to reduce energy consumption and boost efficiency, possibly by combining different green technologies and techniques to find a sustainable option.

As the IMDA and its industry partners continue to explore the possibility of a true “green” data center in a tropical country with limited renewable energy, data center providers will more likely to adjust its business plans and projections in expectation of the carbon tax to be brought into effect in 2019.

Hear more about Carbon Tax at the upcoming APAC Datacenter Design & Operations Convention 2018 on 4th July.


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The State of the Cloud

Just how healthy is our cloud environment? Is cloud adoption and growth going the way it was predicted over the last few years or has it stagnated or dropped off?

I have been doing a little scratching around the surface, had a look at some of the research companies and spoken to a number of commercial cloud operators to find out a little about the health of cloud market today.

Back in 2009, I predicted that Cloud Computing was getting ready to take flight and advised the audience to ‘watch this space’. The ‘Cloud’ is not a technology or tactical direction instead, one of a strategic direction.

Major global cloud operators such as Google, Amazon, Microsoft over the past number of years have reported steady growth with huge gains over 2017. They all report very strong upward curves and predict this will going through 2018 and on for the short term with no reason to slowdown in the foreseeable future. Microsoft doubled its revenue during the 2017 fiscal period.

So, why are we seeing such rapid and exponential growth with colocation/cloud? There are a number of factors to be considered and are divided between;

  • physical infrastructure
  • cost of real estate
  • management and maintenance
  • network bandwidth and connectivity
  • increase in offered services maturity and diversity
  • security
  • scalability to mention a few

The development and increase of these services have steadily been rising with one major research company stating that Cloud Services were 7% of the total market in 2010 and are predicted to rise 30% more by 2020. Two years away and I believe will roll right through that upper mark.

One major Asia-pacific data centre cloud provider states that the data centre must adopt and support digital transformation. The digital transformation is achieved by delivering a ‘cloud-first architecture’ that has been designed to be more adaptable and responsive to meet the requirements of the end user.


We are seeing a transformation with offered services such as;

  • IaaS
  • SaaS
  • PaaS
  • Original basic managed services being replaced with wholesale colocation
  • Connectivity-centric colocation
  • Automated infrastructure
  • Complex managed/hybrid cloud
  • All Flash Storage appliance
  • Container architecture
  • Storage as a service
  • Data protection as a service
  • Object storage as a service and so forth

The Cloud provider noted that Cloud has been delivering data storage connected to AI, Machine Learning, and data scrapping applications, which the Cloud then harvests into useful and purposeful business opportunities. The greater the development is in network connectivity, the more viable it’s flexibility and adaptability will makes of these offerings.

Clients can access large and complex amounts of data remotely without the drag of low bandwidth, knowing the data will be secure in a state of fully redundant and secure facility. A lot of smaller organisations, in particular, take advantage of the reducing cost and overhead of having their compute environment in-house. Yet it’s not just the small organisations taking advantage of the exploding cloud market, we have been seeing major corporations adopting this approach in recent years.

Is the cloud healthy? It certainly is!

Keen to know what more can it be done within the Cloud Environment? Join 500 senior executives and hear from experts like our co-founder at the World’s first ever event for Data Center, Cloud and Connectivity buyers – the Global Selection Convention 2018, organised by W.Media.

See how hyperscalers, banks, government, ecommerce, etc. make their decisions differently. As well as key datacenter and cloud providers showcasing their global footprint and expertise at APAC DC 2018and our unique thought leadership sessions.

Unless you wish to visit any of the data centers in Asia, then to feel free reach out at our event concierge team to plan an itinerary for you.

The Battle Between Cloud and Edge Computing

All the rave about Edge computing, and many still hold the misconception that it will take over the Cloud.

Prior to understanding how Edge and Cloud computing are interrelated, we need to take a step back and look into another current favourite technology term – the Internet of Things (IoT).

IoT was coined by Kevin Ashton back in 1999, and even with all the hype since 2016,  it is still considered to be in its infancy stage. International Data Corporation (IDC) forecasted in December 2017 that IoT spending will sustain a compound annual growth rate (CAGR) of 14.4% through the 2017-2021 forecast period surpassing the $1 trillion mark in 2020 and reaching $1.1 trillion in 2021.

With strong beliefs that over the next 3 years IoT will rapidly streamline business processes and redefine living with smart appliances, systems, and environments, newer technologies with major focus on reducing network traffic and resolving data processing problems are needed.

Conveniently, Edge Computing is recognized as the newer technology and thought to be taking over Cloud Computing. With the latter being an integral part of most businesses and internet users, the debate whether to opt for Cloud or Edge computing arises.

Demystifying Cloud and Edge Computing

Cloud computing, specifically public Cloud, delivers hosted services such as databases, storage, software, networking, over the Internet. It provides ease and availability of services, flexibility of migration, different types of deployment models, and services.

Edge computing is a method of optimizing or processing cloud computing systems data at the edge of network (closer to the data source). By processing data locally, the backhaul traffic to the central repository can be drastically reduced in most scenarios. This method helps to reduce the size and optimize data nearer to the source before sending it to data centres or cloud systems, across long routes.

Importance of Edge Computing in Cloud Computing

As we understand more, it becomes evident that both Cloud and Edge computing serve different purposes. Rather than being competing technologies, they complement each other. Implementing Edge in a Cloud computing model ensures optimized data, increased performance, and ease of data access to customers. Organizations would benefit from being able to analyse critical data in near real-time at the source and data latency gets reduced. Analyst Robert Cihra wrote that the best-positioned vendors for Edge computing early on include Amazon, Apple, Tesla, and GM.

In short, if Cloud computing is about centralizing processing and storage of data for stable and efficient platform for computing, Edge computing is about pushing the processing and storage closer to the data sources. Cloud computing is a broader concept which can or cannot include Edge computing technology, depending on the requirements of customers.

Gartner’s Thomas Bittman says on his blog, “The agility of Cloud computing is great – but it simply isn’t enough.” All the battle on the internet between Cloud and Edge technology enthusiasts make it an interesting debate as we try to understand what each of these are and what it holds for the future of technology.

Keen to know how getting closer to Edge Computing not just means for Cloud, but for data centers and connectivity? Join 500 senior executives and hear from experts like Spencer Denyer at the World’s first ever event for Data Center, Cloud and Connectivity buyers – the Global Selection Convention 2018, organised by W.Media.

See how hyperscalers, banks, government, ecommerce, etc. make their decisions differently. As well as key datacenter and cloud providers showcasing their global footprint and expertise at APAC DC 2018and our unique thought leadership sessions.

Unless you wish to visit any of the data centers in Asia, then to feel free reach out at our event concierge team to plan an itinerary for you.

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