Southeast Asia is driving the growth of global cloud infrastructure, prompting foreign cloud service providers and data center operators to invest billions of dollars in the region.
According to Nikkei Asia, industry analysts predict that Southeast Asia will become the center of growth for data centers for global cloud vendors due to the expected demand for data in the growing internet economy. Based on a study led by Google, the online economy is projected to be worth $330 billion in 2025.
Public cloud market revenue in the ASEAN region is expected to show an annual growth rate (CAGR 2023-2027) of 18.97%, resulting in a market volume of US$19.72bn by 2027, in a report by Statista.
The boom in the region can be seen through various investments in countries such as Malaysia, Thailand and Indonesia and the projected growth in other emerging nations. NTT Group of Japan will construct its third data center in Bangkok, investing $90 million. In Malaysia, Amazon’s cloud computing unit recently announced that it will be investing $6 billion over the next 14 years. The use of cloud computing may potentially boost Indonesia’s GDP by US$10.7 billion between 2021 and 2025. Indonesia already has cloud providers AWS, Google, Microsoft and Alibaba set up in the country.
Vietnam, among the newer emerging data center markets in the region, is expected to see an increase from $561 million in 2022 to $1,037 million in investments by 2028, representing a compound annual growth rate (CAGR) of 10.68% over the six-year period. There is also a push by the Vietnamese government which launched the Digital Transformation Program 2025 with the aim of shifting around 50% of businesses to digital platforms by 2025.