Are data centers still necessary in Southeast Asia’s cloud computing era?
Published 7 January 2021
Southeast Asia is moving into an era of cloud computing, with rapid growth bringing the market value to a staggering US$40.32 billion by 2025.
With data centers often seen as a separate data center storage option to the cloud, this begs the question: Are data centers still necessary in Southeast Asia’s cloud computing era?
This year, we have already seen Nokia agree to migrate all its data centers, servers and software applications onto Google Cloud. And by next year, Cisco predicts cloud data center traffic will represent 95% of total data center traffic.
Migrating to cloud offers flexibility, fast innovation, third party maintenance and on demand scalability for businesses looking to digitally transform without the need to maintain their own server room or wait to continuously add more servers into a traditional data center.
But it is a myth to think that data centers won’t be necessary in a cloud computing future. After all, the third party cloud providers will need somewhere to store all your data.
“All cloud computing in the ecosystem requires data centres as a fundamental infrastructure. As more and more data are being produced every day in the age of digital transformation, physical data center infrastructure is required to support this growth. Without data centers, cloud computing on a national or regional scale is impossible,” said Supparat Singhara Na Ayutthaya, the Chief Executive Officer at ST Telemedia Global Data Centres (Thailand).
Whether you’re using Google Cloud in Indonesia, AWS in Singapore, or Microsoft Azure in Malaysia, these public cloud providers will need to create availability zones or build data centers in the country to meet the varying data localisation and protection laws and regulations.
“Each country in Southeast Asia has its own laws and regulations to comply with. Understanding the laws and regulations of the local market is the very first step prior to market analysis. Subsequently, customers need to ensure that their data center operators have a global track record in designing, constructing and operating state-of-the-art, carrier-neutral data centres and are attuned to the needs of end users,” added Mr.Singhara.
ST Telemedia Global Data Centres (Thailand) are building Bangkok’s first hyperscale data center campus in response to the country’s growing digital requirements for connectivity, low latency and data processing.
Many data center operators do not see cloud providers as their competitors, rather they can be their customers, as the demand for hybrid cloud solutions is exponentially growing to meet the needs for users who are looking for the advantages of cloud coupled with the hardware customisability, control and greater compliance offered by on-premise data center infrastructure.
“We don’t feel that Princeton Digital Group competes with cloud service providers, rather they are our customers,” said Stephanus Tumbelaka, Princeton Digital Group’s Managing Director of Indonesia.
In fact, the entry of cloud providers into emerging markets like Indonesia, the Philippines, Malaysia, Thailand and Vietnam can mean positive growth opportunities for data center providers.
“Cloud providers have taken over 70% of new data center space in the Asia Pacific market recently. Cloud providers such as AWS, Microsoft, Google are key data center buyers, while Chinese cloud providers such as AliCloud, Huawei, Tencent are matching up to leading American competitors in terms of their demand for data center space. These generate huge demand for both colocation space and dedicated hyperscale data centers for the cloud providers in this region. Having cloud providers as tenants is definitely a key target for data center colocation providers,” said Chang Cho, CEO at ONION software and ONION technology.
“We see it as a positive sign when cloud organisations start to enter the market because it actually means the market is going to move, not just for them, but for data center providers like ourselves,” said Carolyn Harrington, the Chief Operating Officer of SpaceDC.
All organisations have different needs and fast-growing data consumption, so with digital infrastructure options like public cloud, private cloud, hybrid cloud, multicloud, traditional data centers, colocation data centers, edge data centers, hyperconverged infrastructure and more, these organisations have greater choice and opportunity to digitally grow their business.
And with increasing accessibility of high data consuming technologies like cloud computing, 5G, artificial intelligence and the Internet of Things, data centers of all kinds will be crucial to enable the next wave of digital transformation.
Interested in learning more about Data Centers? Join us at Digital Week: Southeast Asia, where we’ve gathered ASEAN’s best and brightest to cover everything from datacenter deployment to digital banking. This 4-day virtual conference will enable you to network with 7000+ Senior IT Leaders across the Malaysia, Indonesia, Singapore, Vietnamese, Philippines, and Thailand markets.