In most things, greater connectivity and integration usually bring about improved performances and benefits through synergies – the whole is often worth more than the sum of its parts. In the data center industry this is often of even greater importance on both global and regional scales.
In the Asia-Pacific (APAC) region, GDS – a leading developer and operator of data centers throughout China and Southeast Asia – is epitomizing the benefits of this through their SIJORI Connect strategy.
Singapore Spillover Drives Expansion
GDS’ SIJORI Connect strategy – expanding their investment throughout Singapore, Malaysia (Johor) and Indonesia (Batam, Riau island) – has been driven by both sides of the data center market. On the one hand, demand for capacity in the region has continued to grow and is set to do so at an even greater rate as artificial intelligence (AI) drives the need for computing power. On the other hand, Singapore has limitations such as the lack of land and high costs of electricity. This creates growing demand for DC capacity which GDS believes can be captured through its SIJORI strategy.
Indeed it is this need to strengthen the regional hub and connectivity that the Singapore government recognized itself when selecting successful applicants earlier this year. Though a broad number of areas were considered, GDS was awarded local data center capacity in no small way thanks to its SIJORI strategy, according to Jimmy Yu, GDS Senior Vice President of International Business.
Key to this, suggested Mr. Yu, was the company’s intentions to keep Singapore as a key linchpin in its efforts, while developing and expanding capacity elsewhere in the neighboring regions. By establishing a smaller but significant deployment in Singapore, and growing connectivity throughout the region, Yu believes the country’s spillover and regional demands can start to be met.
GDS has pioneered this expansion in both Batam and Johor, and by doing so at such committed levels, is set to benefit by going first.
First-Mover Advantage
Going first often has its advantages, and by making its move into the SIJORI region early, GDS is likely to benefit in two key ways
Firstly, by moving early, GDS have now placed themselves in a position to provide customers with capacity ahead of competitors who were slower to make the move. This “forward-thinking mindset”, Mr. Yu suggests, will greatly reduce the development cycle all the way from land acquisition, through data center completion, to customer handover.
Naturally Mr. Yu sees this as a competitive advantage for GDS, allowing the company to reduce customer ramp-up compared to if they had to wait for facilities to commence operations, as may be the case with other firms moving into the region.
Secondly, going first allowed GDS to have the pick of the prime locations in the region. This very practical element means the company was able to find the most suitable land, in the ideal locations, and with the resources and infrastructure necessary for data center operations ready to go. The benefits of this are passed on to their customers in terms of time to market, competitive costs and reduced latency.
What Benefits One Benefit Others
The rewards of GDS’ SIJORI Connect strategy are not limited to just itself however, with both regional governments and other DC operators now set to benefit where GDS led the way.
In Indonesia, for example, GDS was a first mover when it started building the data center campus in the Nongsa Digital Park. This helped spark a new market for nearshore development in Singapore and established Batam as a critical data center and subsea connectivity hub. In September 2023 the company announced a partnership with Indonesia Investment Authority – the country’s sovereign wealth fund – that will see the DC landscape in the region develop and expand even further.
In Malaysia, the benefits are perhaps even broader. As a first mover with its Nusajaya Tech Park data center campus in Johor, which the company opened in August this year, GDS worked closely with the Malaysian government to establish what requirements data centers need. This means that, from the horse’s mouth so-to-speak, national and regional governments were able to learn exactly what infrastructure requirements, energy needs and all the other myriad issues DC operators face.
This collaboration both educated the market and allowed for the influence of industry standards. In effect GDS’ feedback to the Malaysian government help to set the standards for subsequent development of the DC ecosystem in the country.
In addition, GDS’ deployment in Johor was a catalyst that fostered greater collaboration between the governments of Singapore and Malaysia, which in turn improved connectivity between the two countries. Indeed GDS has such good standing in the country that it was awarded Malaysia Digital (MD) status – the highest award offered to digital infrastructure companies – the first awarded in the country.
This collaboration has now facilitated hyperscale deployment for others in the country, and by doing so has helped the Iskandar Puteri region emerge as one of the most sought-after data center locations in APAC.
GDS may be the pioneer in the SIJORI region, but where it leads, everyone will stand to benefit. Both in infrastructure, policies and knowledge, the links and ties with Singapore as a data center hub are becoming more established.
Ready To Meet AI Demand
The growth of the industry seems likely to continue at an ever-increasing rate, with the world seemingly on the cusp of an ‘AI Revolution’. Natural Language Processing (NLP) and generative AI like ChatGPT are not just dominating headlines, but creating increased demand for computing power on a global scale. The more computing power that is required, the more data centers will be needed to facilitate it.
While many operators may be playing catch up as this wave hits, GDS sees itself as established and ready to go. It will be meeting demand while others are just getting established.
(This article was originally featured in the second edition of our Cloud and Datacenters magazine)
