The APAC data center market outlook 2021-2026: Report

Reportlinker.com announced the release of the report “APAC Data Center Market – Industry Outlook and Forecast 2021-2026”.

The APAC data center market share has been witnessing exceptional growth since the outbreak of the COVID-19 pandemic, which has increased the access to internet-related services aided by lockdowns and restrictions imposed by government agencies across the region.

The APAC data center market by revenue is expected to grow at a CAGR of approximate 6% during the period 2021–2026.

Colocation service providers witnessed a strong uptake of data center spaces by existing customers owing to the growth in demand during the pandemic.

Due to the emergence of a new business environment, cloud service providers and video conferencing service providers have significantly contributed toward colocation and data center services, the report found.

COVID-19 impacts vary

In Japan, the data center construction witnessed no impact due to the pandemic, however, data center operators implemented stringent precautionary regulations for the safety of their employees.

Similarly, in India, a country-wide lockdown lasted for around 60 days with a majority of operations performed via online and remote mediums, which increased internet users by 25%. Hence, the market witnessed a strong spike in the announcement of new projects across India, China, Malaysia, and Japan in Q3 2020.

Growth factors

The report identified the following factors are likely to contribute to the growth of the APAC data center market during the forecast period:

• Implementation of 5G Network triggering Edge Data Center Investments

• Procurement of Renewable Energy

• Installation of Innovative Data Center Technology

• Artificial Intelligence Enhances Liquid Immersion & Direct-to-Chip Cooling Adoption

Demand for computing infrastructure increased

The demand for high-performance computing infrastructure is increasing due to the adoption of IoT, artificial intelligence, and big data analytics in China and Hong Kong. The adoption of blade type servers is set to grow in China and Hong Kong. Over 90% of data centers in China have adopted blade servers for the high-density computing environment. The demand for supercomputers is also increasing with the adoption of digital currency in these countries.

The IT infrastructure spending in Australia will be dominated by cloud-service providers, followed by enterprises, involving self-managed IT infrastructure solutions. Over 50% of the business IT budget is spent on the migration to cloud-based services in Australia, with IaaS spending leading the chart.

In India, a rise in the cloud, big data, IoT, and artificial intelligence technology by enterprises is a major driver for the IT infrastructure market. Around 70% of start-ups in India are adopting IoT technology, with healthcare and manufacturing segments attracting the highest investment.

The demand for modular data center facilities deployed in Southeast Asian countries is high. The procurement of lithium-ion UPS is expected to grow in the region to avoid high OPEX on VRLA systems. The data center development is likely to be of higher capacity, typically over 5 MW, requiring the adoption of 2N redundant backup systems owing to challenges related to power fluctuations and outages.

In China and Hong Kong, a majority of data centers adopt a combination of air and water-based cooling techniques to cool down facilities. However, a few facilities are built to support free cooling techniques. Data centers in India mainly use air-based and few facilities operate using water-based cooling systems. However, data centers are not completely suitable for free cooling. Few states in the country support free cooling of up to 1,000 hours annually.

High air pollution levels in major cities across India could make free cooling an unfeasible option for operators. Most high-density environments are likely to consider water-based cooling systems, while small-scale deployments could operate through air-based cooling systems in the country. A majority of data centers in Singapore are designed to adopt water-based cooling techniques. The growth of data center construction market in APAC will aid in the development of facilities that would comprise multiple chillers, cooling towers, and CRAH units with N+N redundant configuration.

China led greenfield constructions; Malaysia expected to see more new projects

In terms of general construction, China leads greenfield construction. Hong Kong is expected to witness largely brownfield developments due to the space shortage during the forecast period. A majority of the construction contractors are located in these markets. Whereas in India, the increased interest to improve efficiency and reduce OPEX is driving data center operators to procure intelligent DCIM solutions for end-to-end monitoring of facilities.

Most data centers developed in Malaysia during the forecast period are expected to be greenfield. The market also has a strong potential for growth among modular data center projects. The labor cost in Malaysia is cheaper than in Singapore. However, the availability of a skilled workforce will be a major challenge among providers.

More high-tiered projects in the works

In the APAC region, several under-developed projects fall under the Tier III category, and the trend is expected to continue during the forecast period, with several operators likely to shift to the Tier IV category.

Higher tier means that the data center is capable of providing a higher level of service.These metrics of level include redundant electrical path for power, uptime guarantee, cooling capacity, and concurrent maintainability, to name a few.

In terms of colocation, these facilities will cost higher per rack basis than Tier I and Tier II facilities. Most new data centers are designed as Tier III standards with a minimum of N+1 redundancy. Tier IV data centers are equipped with minimum 2N+1 redundancy in every infrastructure that makes the facility fault-tolerant, with some facilities having 2N+2 redundancy of infrastructures such as UPS systems and PDUs.

Mega-projects in China & Hong Kong data center markets are designed to be of Tier III and Tier IV standards, which are leading to a high deployment of 2N redundant UPS systems. Multiple data center facilities with a power capacity of more than 10 MW are implemented in Australia, which is increasing the adoption of over 500 kVA capacity UPS systems. DRUPS systems are majorly adopted in the country.

Facebook, Apple, Microsoft, and Google are the major contributors to Tier IV data centers. These facilities generate more revenue for the APAC data center market, with focused investment on highly efficient cooling systems.

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CenturyLink rebrands as Lumen to light the way for enterprises in 4th Industrial Revolution

Leading global IT solutions provider CenturyLink has announced it is rebranding and repositioning the company to Lumen Technologies, or Lumen for short. 

According to FAQs on their website, the name Lumen pays homage to their global fiber network foundation and serves as a reflection of the company today. 

“Lumen is all about enabling the amazing potential of our customers, by utilizing our technology platform, our people, and our relationships with customers and partners,” said Lumen president and CEO Jeff Storey.

Lighting the way for enterprises

The company will look to help light the way for enterprises through the challenges and opportunities of the Fourth Industrial Revolution where smart, connective devices will be ubiquitous.

“This new age requires companies to effectively acquire, analyze and act upon their data to stay ahead of the curve and to be competitive,” said Lumen in a statement

There will be three distinct brands under the Lumen Technologies corporation: Lumen, CenturyLink and Quantum Fiber. 

Lumen will serve as the company’s new brand for its largest business segment: enterprise and wholesale, which will be the company’s focus moving forward.

“The Lumen brand is focused on supporting our enterprise business customers. It alludes to our network strength and to the incredible capabilities powered by our platform to help transform how businesses operate,” according to Lumen CTO, Andrew Dugan. 

Under Lumen, the company launched the Lumen Platform, which combines their global fiber network infrastructure, edge cloud capabilities, security, communication and collaboration solutions to empower customers looking to capitalise on emerging Industry 4.0 technologies. 

“All of our futures will be driven by smart things, applications and digital services that use data for transformational purposes,” said Shaun Andrews, Lumen’s executive vice president and chief marketing officer. 

The Lumen Platform will serve a range of applications across smart cities, retail and industrial robotics, real-time virtual collaboration, automated factories, as well as applications requiring high-performance networking and security.

As part of Lumen, the existing CenturyLink brand will continue to represent the company’s residential and small business segments, for legacy services delivered over traditional networks. 

Lumen also announced another new entity, Quantum Fiber, which will be considered a CenturyLink service. It is a digital platform that will aim to deliver premier fiber-based connectivity to residents and small businesses under Lumen’s fiber network and infrastructure. 

Quantum Fiber will target the same customer segment as CenturyLink, but it will be delivering services via an automated platform the company is developing, but specific roll out plans are yet to be confirmed.

The Quantum Fiber brand will eventually be available in all markets where Lumen offers fiber-based internet services.

With this announcement, the company will formally change its legal name to Lumen Technologies, Inc. upon the satisfaction of legal and regulatory requirements. 

There will be no structural change in leadership, responsibility or financial strategy. However, it will be changing its stock ticker from CTL to LUMN, effective with the opening of the trading day on September 18 2020. 

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Malaysia to shut down 3G by 2021, but national 5G plan may be delayed until 2022

The Malaysian Government has announced a National Digital Infrastructure Plan (JENDELA) that will put an end to 3G networks in Malaysia and prepare the country for its transition to 5G.

Prime Minister Tan Sri Muhyiddin Yassin stated the decision to eliminate 3G networks is to “strengthen the coverage of 4G networks [in Malaysia], as well as establishing a solid foundation for 5G”. This will be completed stage-by-stage until the end of 2021.

The Malaysian Government has currently rolled out phase one of JENDELA. Goals to be achieved under phase one include expanding 4G broadband coverage from 91.8% to 96.9% in populated areas, and increasing broadband speed from 25Mbps to 35Mbps.

Phase two of JENDELA will focus on the East Malaysia states of Sabah and Sarawak, where internet coverage is significantly lower than states in West Malaysia. Under the plan, Sabah and Sarawak will be the biggest beneficiaries: existing communication towers will be upgraded and hundreds of new communication transmitters will be installed.

Shortly after the Prime Minister’s announcement, Communications and Multimedia Minister, Saifuddin Abdullah, unveiled an Industrial Revolution 4.0 digital road map outlining the details of phase two. Said road map is scheduled to be released in mid-September.

However, a report by research firm CGS-CIMB revealed that 5G in Malaysia is expected to be deferred to 2022 due to ‘existing uncertainties in terms of how and over what timeframe [phase two] is to be achieved’ as well as the need to prioritise optimising speed and coverage of 4G networks.

Despite the delay, this marks the beginning of an exciting turn for Malaysia’s digital economy. Malaysia’s promise to switch off 3G and welcome 5G indicates a strong commitment to assist Malaysians in overcoming the demands of working from home in the midst of a pandemic. 

The rise of 5G in Malaysia could also mean a boom in cloud services, as applications may be more accessible by users across the country, which is only more good news to the country’s fast-growing digital economy.

5G may also enable more edge data center technologies by bringing lower latency, higher reliability and faster data processing that is closer to the user. This is particularly important, as Malaysia looks to be moving closer to the edge, with new projects announced by Bitglass, GDC and Vertiv this year.

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Dramatic surge set for edge computing market, driven by industrial enterprise adoption

The multi-access edge computing market is set to grow at an incredible annual rate of 157.4%, generating US$7.23 billion by 2024, which dwarfs the 2019 revenue of US$64.1 million.

The edge computing solution from operators in wireless networks is expected to be utilised by 90% of industrial enterprises in the next three years, predicts Frost & Sullivan.

“The recent launch of the 5G technology coupled with MEC brings computing power close to customers and also allows the emergence of new applications and experiences for them,” said Renato Pasquini, the Research Director for Information & Communication Technologies at Frost & Sullivan.

While only being in its nascent stage, edge computing offers shorter latencies by being close to where the data originates, which also provides robust security, responsive data collection and lower operating costs.

This is particularly important in a world where industrial industries are becoming increasingly hyper-connected with growing adoption of the Internet of Things, smart factories, remote monitoring solutions, autonomous robotics and vehicles.

The demand for edge computing is also growing, as data-driven organisations and governments increasingly require significant streams of data for real-time analytics.

“Going forward, 5G and multi-access edge computing are an opportunity for telecom operators to launch innovative offerings and enable an ecosystem to flourish in the business-to-business segment of telecom service providers using the platform,” added Mr. Pasquini.

Within the multi-access edge computing ecosystem, software edge applications promises the highest annual growth, followed by telecom operators, infrastructure-as-a-service providers, and edge data center colocation services.

However, Frost & Sullivan identified a number of challenges restricting the growth of the market, including an underdeveloped ecosystem in different verticals, limiting the number of solutions and applications available.

The implementation of multi-access edge computing also requires heavy initial capital investment and lacks standardisation, which currently limits the number of cities that can adopt this technology.

How can you tap into the edge computing market?

The multi-access edge computing market is expected to drive new revenue-generating use cases, particularly for telcos in the application of 5G wireless technology, despite delays in the rollout of networks due to the COVID-19 pandemic.

To tap into this lucrative market, Frost & Sullivan made a number of suggestions. Telecom operators, for example, should work on solutions and services to meet requirements for connected and autonomous cars, which could include advancements in 5G technology.

In order to make this a reality, telecom operators are advised to partner with cloud providers and organisations like AWS, Microsoft Azure, Google Cloud, and IBM Cloud that work with artificial intelligence and machine learning to design autonomous cars and drone delivery. 

System integrators could also tap into 5G by providing end-to-end solutions, which the research firm noted would be a significant value addition for enterprises, as 5G requires specialised skill sets.

By combining 5G with new specialised hardware-based mobile edge computing technologies like edge routers and data centers, these solutions can meet the market’s streaming media needs, as telecom operators must address the rising consumption of high-definition video streaming on mobiles.

Frost & Sullivan urged companies in the space to capitalise on the innovation opportunities utilising 5G and multi-access edge computing, including augmented reality, virtual reality, ultra-high-definition streaming and cloud gaming.

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