Southeast Asia is forecast to be the fastest-growing region for data centers, and sustainable growth is a top priority, according to a new study by Digital Realty.
In a report titled The Future of Data Centers in the Face of Climate Change, Digital Realty and Eco-Business found that 89% of regional experts predict a significant data usage growth in the region over the next five years.
“Southeast Asia has emerged as a highly sought-after region, with Singapore accounting for an estimated 60% of the region’s total data center supply,” said Mark Smith, the Managing Director of Asia Pacific for Digital Realty.
In line with Digital Realty’s Data Gravity Index, enterprises are found to be expanding rapidly within Southeast Asia, driving demand for robust regional IT infrastructure. As a result, a number of data center providers have announced projects this year in Indonesia, Malaysia, the Philippines, Thailand, and Vietnam, while Singapore currently has a moratorium on new data center builds.
“While Singapore’s stable, pro-business environment, low-risk geographic features and abundant connectivity options make it an attractive destination for data center players, the country needs to remain competitive in the face of rising competition,” added Mr. Smith.
According to the research, Singapore may be held back in its long-term growth as a competitive and sustainable data center market due to its sparse land, while the Southeast Asia region is impeded by its tropical climate and policy gaps.
Despite this, Indonesia and Malaysia were identified as rising stars in the data center industry and a rival to Singapore, as they offer ease of access, a lower cost of entry, and a fast-growing base of tech-savvy consumers to drive data storage needs. And for sustainable growth, both countries have an abundance of land mass for data center operations to expand, which gives them the physical capabilities to generate their own supply of renewable energy.
In a survey of more than 200 experts across Singapore, Malaysia and Indonesia, Digital Realty found 96% of respondents indicated that COVID-19 has further intensified data demand and underscored the importance of digital technology and data centers.
“Singapore has a tremendous opportunity to fortify its regional leadership and build upon its position as a sustainable global data center hub in the post-pandemic world,” predicted Mr. Smith.
With some of the fastest-growing digital economies in the world and rapid acceleration of data services demands, it is crucial that data center providers find a way to meet these needs while also making sure each country meets their climate targets, said Jessica Cheam, the Managing Director for Eco-Business.
“It is encouraging to see that most customers in the region view sustainability as a key consideration when choosing a data center provider,” said Aaron Binkley, the Senior Director of Sustainability at Digital Realty.
However, the study revealed that 71% of respondents highlighted a lack of environmental awareness as a key challenge in making data centers more sustainable, followed by lack of investment at 65%, and a lack of collaboration from stakeholders at 61%.
One of the biggest demands on energy in data centers is the cooling equipment, which is especially important in hot and humid climates like the ones we experience in Southeast Asia.
The report found that cooling needs represent 35%-40% of total data center energy demand, but, while more funding for research is needed, efficient technologies and processes like liquid cooling represent a significant opportunity for operators to reduce energy usage and cost.
“We believe cooling technology will be a game-changer for data centers, especially in Southeast Asia’s tropical climate,” added Mr. Binkley.
The Southeast Asia region is also witnessing promising developments in renewable energy for data centers, with solar power standing out for its sizable potential supply in places like Indonesia and Malaysia as well as Singapore, which can find ways to increase its solar supply through domestic production and imports.
The use of renewables is being driven by tech giants like Microsoft, Google, Amazon and Facebook, who have set ambitious targets to lower their carbon emissions in data centers to meet the UN Sustainable Development Goals.
These set a positive example for the rest of the industry to follow, but to do this, the report recommends that all members of the data center ecosystem must work together to share expertise in the region and be bolder in integrating new technologies to raise the efficiency of facilities.
With digitalisation pressures and an ever-increasing reliance on stable digital infrastructures here to stay, it is important that we act now to make sure we grow sustainably for future generations to comfortably enjoy the fruits of our digital transformation labour.
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