The Asia Pacific region is set to become a prominent enterprise data powerhouse by 2024, according to new research by Digital Realty.
With 80% of data expected to reside in enterprises worldwide by 2025, the growing position of APAC is significant and places it in strong competition with Europe and North America.
The region is predicted to have the highest annual growth rate of any other in the world at 153% by 2024, as close to 30% of global data center space will be in APAC by 2023 due to increasing demand for cloud services and digitalisation from investors and enterprises.
Four cities in the top six for the Data Gravity Intensity Metro forecast are from APAC, including Singapore in first place, Hong Kong in second, Sydney in fourth and Tokyo in sixth.
“Singapore’s recognition in the Digital Gravity Index reaffirms our decision to invest in the country. Likewise, Hong Kong, Sydney and Tokyo … are proven international financial and business hubs, providing rich gateways for global enterprises to connect to various parts of the world,” said Mark Smith, the Managing Director for Asia Pacific at Digital Realty
Digital Realty is due to open their third colocation data center in Singapore early next year, and in 2020 they opened their first data center in South Korea. Their research comes as the world readies itself for growth brought about by the fourth industrial revolution, which has the potential to create US$3.7 trillion in value by 2025.
Countries in APAC with sizeable industrial bases kickstarted their Industry 4.0 initiatives rather early compared to other markets, allowing them to dive deeper into establishing institutional frameworks to support the scalability of advancing technologies, rather than cover the surface on creating awareness.
“Asia Pacific is home to some of the leading business and data hubs spearheading the adoption of advanced technologies including 5G, Artificial Intelligence and Internet of Things in the world,” said Mr. Smith.
With a greater preparedness for the next industrial revolution, Asia Pacific is predicted to exponentially attract more data to the region. This is because Digital Realty’s Data Gravity Index DGx revealed that regions with strong global connectivity and an abundance of data-led industries like tech companies and financial services create so much enterprise data that it results in a ‘Data Gravity’ effect.
“We’ve seen that Data Gravity not only attracts data but makes both data and services that rely on it exponentially more difficult to move,” said Dave McCrory, the man who coined the term Data Gravity in 2010 and led research on the Data Gravity Index DGx.
Measured in gigabytes per second, Data Gravity Intensity is expected to grow at a compound annual rate of 139% globally due to globalisation, urbanisation, data localisation laws and digital transformation of businesses and (cyber)security policies.
“This gives cities with a particular weight in one industry, like Singapore’s robust financial services space or Japan’s established manufacturing sector, a huge advantage as they naturally attract more of the same kind of data and services – and with them businesses. This also makes it more challenging to attract opportunities away from them,” said Mr. McCrory.
The rise in data gravity follows the trend towards data stewardship where businesses are more concerned about how their data is managed due to increased regulations like GDPR and PDPA. As a result, global enterprises are increasing their digital infrastructure capacity to aggregate, store and manage the majority of the world’s data.
And it’s not only the abundance of enterprise data that is giving APAC cities a great advantage, but also the flow of that data between them.
According to the Data Gravity Index DGx, APAC is home to many of the world’s most interconnected city pairings. This can be attributed to the regulatory ease of doing business with one another, as well as the cities’ thriving financial and manufacturing centres.
Data Gravity weighing down innovation
But being in a city with strong Data Gravity and fantastic interconnectivity can have its downsides.
“For businesses, it’s less advantageous. Data has become a key strategic resource, but data gravity means too much of it can be difficult to use and impossible to move while constantly creating and attracting more,” said Mr. McCrory.
Enterprises can become overwhelmed by the volume of data, which, just like gravity itself, can weigh down digital transformation efforts instead of enabling them.
“There’s a good story to tell here. But there’s another side to the story, too, with growth resulting in the compounding force of data gravity,” said Tony Bishop, a data center industry pioneer and SVP for Platform, Growth and Marketing at Digital Realty.
And to keep up with all this data, many of the top enterprises will need access to quantum computing to effectively handle it all. Digital Realty predicts enterprises will need an additional 325 exaFLOPs – 6 exaFLOPs per business – of compute power and 124 exabytes of private data storage. Yet, at the current state, the latest quantum computers are running at around 1.5 exaFLOPs.
“Understanding data gravity and its impact on our IT infrastructure is a difference-maker for our operations and will only become more important as data continues to serve as the currency of the digital economy,” said Munu Gandhi, the VP of Core Infrastructure Services at global professional services firm Aon.
If things get out of hand and volumes of enterprise data becomes unmanageable, it could lead to less innovation, poor customer and employee experiences, increased costs, compliance issues, and security vulnerabilities through an increase of vantage points for threat actors.
“Data gravity is the idea that data is an anchor that is often hard to move, especially as data volumes grow. If that growth takes place in public or private clouds that are not easily accessible by the enterprise using them, the full value of that data can’t be realized, and the enterprise will be trapped into spending exorbitant sums to free it,” said Eric Hanselman, the Principal Research Analyst at 451 Research.
Yellowbrick Data, for example, is seeing increasing data volumes and the accompanying challenges as the ‘world’s only modern data warehouse for hybrid cloud’.
“Our customers face the stresses of increasing data volumes and a growing user base, both of which are creating operational complexity,” said Allen Holmes, the VP of Strategic Business Development and Alliances at Yellowbrick Data.
Enterprises must understand the Gravity of the situation
Thankfully, it’s not too late, for enterprises to understand the importance of data gravity and how to enhance their business architectures and management of enterprise data, leading to better enterprise workflow performance, better security and cost-savings in the long run as data continues to be the digital economy’s currency.
“Most enterprises and service providers are just at the beginning stages of understanding data gravity’s potential impact on their innovation, customer experience, and profitability, but they need to be designing for it now,” said Chris Sharp, Digital Realty‘s Chief Technology Officer.
In order to select where enterprise data should be stored, managed and connected, it should require a strategic decision with a ‘connected community approach’, according to Digital Realty’s Chief Executive Officer, A. William Stein.
Research for Digital Realty’s Data Gravity Index conducted research between August 2019 and August 2020 and drew upon more than a dozen third-party data sources. The research has received praise from Zenlayer, an edge cloud services provider with headquarters in Los Angeles, Shanghai, Singapore, and Mumbai.
“The DGx makes it clearer than ever how important low latency is to emerging markets (e.g. China, India, Brazil) and will serve as an important guide to Zenlayer as we make new deployments around the world,” said Joe Zhu, the Founder and CEO at Zenlayer.
The Data Gravity Index was designed to measure the creation, aggregation and private exchange of enterprise data across 21 metros by taking thousands of data points about where data is being stored.
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Image credit: Digital Realty