ASEAN colocation DC forecast: Hyperscale Cloud and OTT present key growth opportunities

The demand for data storage and managed hosting services is expected to grow exponentially across the ASEAN region, thanks to the growing presence of hyperscale cloud service providers, high penetration of Internet connectivity, and a keen focus on cybersecurity and data privacy, several research agencies reported.

Southeast Asian will be the fastest-growing region for the colocation market, with its market size expanding at a compounded annual growth rate (CAGR) of 13 per cent from 2019 to 2024, according to Cushman & Wakefield’s research.

This trend is underpinned by the rapid pace of digitalisation and surge in demand for cloud-based services across the region, which prompted big corporates such as Google, Alibaba Group, Amazon Web Services (AWS) to expand their cloud infrastructure footprint to facilitate the expansion.

Another report, “Transformative Mega Trends are Driving the ASEAN Colocation Market, Forecast to 2026”, by ResearchAndMarket.com, corroborated the finding.

In mature data centre markets such as Singapore, which still remains the data centre hub in the ASEAN region, the demand for wholesale colocation from global cloud service providers will drive the revenue growth for data centre services.

The government is looking to increase data centre adoption to promote digital transformation across sectors through partnerships with global and local data centre vendors, as well as offering them tax incentives.

Emerging data centre markets such as Malaysia, Indonesia, and Thailand are poised to experience exponential growth due to the abundant availability of resources, coupled with favorable government policies on developing data centre infrastructure.

Markets such as Vietnam are witnessing growing data centre penetration, thanks to local service providers, but these countries lack the necessary connectivity and infrastructure capabilities to attract global data centre vendors.

Governments in these emerging economies are, therefore, focusing on improving the readiness of these countries to support hyperscale data centres by enhancing their telecommunications and network infrastructure.

In established data centre markets such as Singapore as well as countries witnessing high data centre growth rates such as Malaysia, Indonesia, and Thailand, governments have been undertaking several smart city projects as a part of their digital transformation initiatives.

Data centre service providers are, therefore, adopting innovative solutions such as data centre infrastructure management, data centre modernization, and edge or modular data centres to optimize operational workloads and enhance service delivery by limiting latency-related issues.

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