The South East Asia colocation center market is growing rapidly, with Singapore and Hong Kong the two main hubs.
The Singapore government has recently prohibited new data center development in the country, due to land scarcity and environmental concerns.
The Challenge for Colocation Center in South East Asia
The first challenge is finding space for new data centers. In most countries in the region, there is not enough space to house new data centers or even expand existing ones. This is especially true in Singapore, which has limited land available for new construction projects.
Singapore was once known as the world’s most connected country, but now it has lost its position owing to its strict data protection policies and regulations.
The government wants to maintain a high level of privacy and security for its citizens. For example, in April 2019, the government announced that any new data centers would not be allowed to operate in the country unless they met certain conditions.
The government does not allow any foreign companies to set up their servers or storage facilities on their soil and this is why many companies are looking for alternative options like colocation or outsourcing services from other countries like Malaysia or Indonesia.
According to research by Frost & Sullivan, by 2020, the number of enterprises in Singapore will increase by more than 50 percent. This growth in demand has led to a shortage of suitable colocation facilities in the city-state.
Sustainability Became a Hot Topic in G20
The country has a high population density with more than 7 million people living in an area of 632 sq km, which is just slightly larger than New York City.
The power consumption per capita of Singapore is also high at 6,929 kilowatt hour (kWh) per person. This compares to 5,492 kWh per person in the United States and 3,972 kWh per person in China. This makes it one of the most energy intensive countries in Asia.
This has brought serious attention to the Singapore government to find solutions to the environmental problems caused by carbon pollution.
Singapore has started to build a field of renewable energy power plants, but this is far from sufficient for all of its electricity needs.
Meanwhile, Indonesia decided to stop supplying natural gas to Singapore in 2023 because it prioritized meeting Indonesia’s domestic needs.
Indonesia as an Emerging Market with Fast Growing I.T Infrastructure
Indonesia has quite a large number of internet users, more than 200 million users. This penetration was strengthened by the pandemic, which forced most people in Indonesia to work from home.
Access to social media, entertainment, online shopping, and edu tech has drastically increased. And now more and more technology giants are setting up data centers in Indonesia, such as Google, Amazon and Microsoft Azure.
In addition, data and voice communication infrastructure, such as fiber optics, which are already connected to Singapore and will soon be direct to New York, have become quite an exciting factor for investors in the data center sector.
Challenges still exist for Indonesia, namely to reduce the carbon footprint of the data center, increase the efficiency of energy use, and use cleaner energy sources to renewable energy.
Human Resources
In the past few years, many new colocation centers have been established in South East Asia. Many companies around the world are now looking towards setting up their facilities in this region.
As we know, Singapore is currently understaffed in the field of information telecommunications infrastructure. Meanwhile in Indonesia is developing, more and more personnel in the field of information technology.
Read more about: Malaysia data center carbon emissions
Data center technicians need to be trained in order to work properly at their job. This means that they will have to undergo some training sessions before they can actually start working on their own. This is one way for them to acquire new skills, learn about new technologies and get updated with trends in the industry.
Conclusion
The high-tech industry is growing rapidly and the demand for colocation centers is also increasing. This has led to an increased number of companies that provide these facilities. However, the competition among these companies has become fierce, which means that everyone wants to keep their prices low.
However, several parties in ASEAN countries who are members of the Association of Indonesian Data Center Providers are jointly looking for solutions to these challenges.
In the future, Southeast Asia can be the location of choice for colocation data center users around the world.