Dilemma of building data centres in APAC: Need vs Capacity

The COVID-19 pandemic urges countries to adopt online activities, generating huge amounts of data that needs storing on cloud and setting in data centres. The dilemma which is staring at the face of countries seems to be that while building a data centre seems to be irresistible for countries under rapid digital transformation like Vietnam, there is not enough talent pool. Add to that cultural aspects and business services, which are needed to sustain the development of this industry, is still in the evolutionary stage.

According to a survey by Boston Consulting Group (BCG), spending on cloud of most APAC businesses has risen from approximately 3 per cent of their IT budget in 2016 to 5 per cent in 2018, and is expected to jump to 10 per cent by 2023. Although this rate is higher than in the U.S. and Western Europe, the APAC market’s cloud penetration lags behind at just 20 per cent, opening a gap between the intentions to transition to cloud technology and the requisite infrastructure in the region.

“There’s some level of capacity planning and the national infrastructure level required to meet this need of the smart nation, cloud computing, and digital transformation,” said Anthony Lim, regional principal consultant at Fortinet.

Data centre infrastructure in APAC faces constraints with the current electricity and connectivity. In bigger countries like Vietnam, they have to lay cables longer along the way and in smaller countries like Singapore and Hong Kong, they need to fill the power supply crunch.

On top of that, the pandemic has galvanised investment in data centres, but it lacks harmony with a significant uptake of computing services in the region.

“You don’t just build and build data centres and start having cloud services,” he added. “What if you don’t have enough businesses to sustain all the infrastructure in the long run?”

Another issue is that the APAC markets have not prepared the requisite digital skills for rapid digitalisation across the region. Vietnam and the Philippines bottom the chart as not being able to develop both cloud talent internally and externally, as per Boston Consulting Group (BCG) ‘s report.

“We would all agree that the hardest part of digitisation is the culture of people,” said Bryan Carroll, CEO of TNEX, a Vietnam-based digital bank, at 2021 SEA Digital Week. “We need to look at how do we give them the right talent because talent leads to a mindset as well leads to a culture.”

In Vietnam, experts agree that although the country has a young and digitally obsessed population with 15 million Generation Z joining the workforce by 2025, it suffers from the lack of high-quality engineers with enough digital and cybersecurity skills.

As university is the determinant in providing skills and knowledge, Vietnam still needs “a period of time” before reaching that effective education in schools, Carroll pointed out.

Robert Tran, cybersecurity and technology risk leader at consulting firm Ernst & Young Vietnam, noted that many talented Vietnamese engineers even go to Singapore, Malaysia or Thailand because of higher salaries and better working conditions.

The 2021 State of Threat Intelligence report also found that deep and dark threat intelligence is gaining traction across the cybersecurity industry, but registers a lack of related expertise.

“The cybersecurity skills shortage is not just Vietnam problem, it’s a global problem,” Tran underlined.

 

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