Why Asia is now the data centre destination of choice

Why Asia is now the data centre destination of choice

Facebook has announced Singapore as the destination for its new data centre.

The internet giant is investing S$1.4 billion in a region showing some of the fastest audience growth (13.4% – almost double worldwide gains).

The statement of intent follows a similar move by Google who last month outlined plans to build their third Singapore-based data centre.

Why Singapore leads the way

Earlier this year Singapore was placed top of Cushman & Wakefield’s, Data Center Risk Index for its market robustness. Analysts cited “strong network infrastructure, diverse connectivity to major APAC markets, its pro-business environment and political stability”. The city-state has turned its relatively small land mass to its advantage, by focusing on increasing efficiencies in power and operations.

Lack of real estate is a challenge in another of APAC’s high-performing regions. In the same report, Hong Kong is ranked third, with the caveat that “The city is also running out of old factory buildings and warehouses to convert into data centres.”

Climate

Cooling has long been one of the data centre industry’s most pressing issues.

Keeping infrastructure at the ideal temperature accounts for 50% of the running costs, as well as 35% of capital expenditure. What’s more, these challenges will escalate due to increasingly powerful processors being used for increasingly powerful use cases. For example, the number of connected IoT devices is forecast to rise by 12% until 2030, when 125 billion ‘things’ will be online and generating data. This is of particular relevance to Asia Pacific, home to over half the world’s online population and where mobile internet usage is rising exponentially.

Belt and Road Initiative (BRI)

The BRI is arguably considered to be the largest infrastructure project of the century so far.

China aims to connect more than 70 countries and their economies across several continents, covering transportation, infrastructure, and energy. The Chinese government envisages the BRI as the conduit for supporting the worldwide growth of its companies. One of the largest, Alibaba, has already invested in various Singaporean companies to aid its planned expansion.

One example is the $5.3 billion Lazada investment. “With a young population, high mobile penetration and just 3 per cent of the region’s retail sales currently conducted online, we feel very confident to double down on South-east Asia,’ says Alibaba senior partner Lucy Peng.

Note: Steering Committee member Equinix is identified as a ‘key vendor in the data centre market in south-east Asia’ by Technavio. The market analysts expect sustained growth in the region – 14% every year until 2021.
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