This research report on the APAC data center colocation market cover market size and forecast, share, industry trends, growth drivers, and vendor analysis. The study includes insights on the segmentation by Electrical Infrastructure (uninterruptible power supply (UPS) systems, generators, rack power distribution units (PDU), transfer switches & switchgears, and other electrical infrastructure), Mechanical Infrastructure (cooling systems, racks, and other mechanical infrastructure), General Construction (building development, installation & commissioning services, building design, physical security, and data center infrastructure management (DCIM)), Colocation Service Type (retail and whole), and Geography (China & Hong Kong, Australia & New Zealand, India, Southeast Asia, and Rest of APAC).
The increased investment from global and local operators is driving the APAC colocation market. The region has and will be a preferred one for cloud service and global colocation providers. The increasing adoption of high-performance infrastructure is likely to revolutionize the APAC colocation market. Factors such as increased demand for cloud computing, the Internet of Things (IoT), and big data analytics solutions, especially from BFSI, healthcare, government, and heavy industries is contributing to the growth. Several enterprises are involved in the procurement of high-performance computing (HPC) systems to process complex application workloads involving machine learning and artificial intelligence (AI).
The growing adoption of converged and hyper-converged solutions and virtualization is likely to boost the rack power density to an average of 8–10kW during the forecast period. Leading operators are developing innovative designs that can support the growth of the rack power density and meet dynamic consumer demands over the next few years. The integration of facilities with power and cooling infrastructure that supports rack density up to 40 kW and liquid immersion cooling that support density up to 200 kW will transform the APAC colocation market.
The demand for colocation and managed services is growing due to technological advancements across industries in the APAC region. Moreover, business digitalization and increased smartphone penetration are the other factors that are driving enterprises to colocate space in the region. Also, many enterprises are using big data analytics and IoT to achieve high competitiveness. Service providers offer colocation, managed services, interconnection, and cloud connectivity solutions. The demand for colocation services is, therefore, propelling investment in the data center market. However, the construction is carried out with a minimum of 30% of the space being pre-leased under development projects.
The APAC data center colocation market is expected to grow at a CAGR of over 8% during the period 2018–2024.
This research report includes detailed segmentation by electrical infrastructure, mechanical infrastructure, general construction, colocation services, cooling systems, and geography.
Electrical Infrastructure Insights
The APAC generators market will continue to grow because of the increased construction of large and mega facilities in the region. The adoption of Diesel Rotary Uninterruptible Power Supply (DRUPS) systems is popular in the region as they combine both battery and flywheel UPS systems and a diesel generator to provide backup power during outages.
The adoption of single-phase lithium-ion UPS systems is expected to increase in the modular data center development as these systems can provide significant benefits to reduce OPEX for service providers. Vendors are also continuously coming up with innovative UPS solutions to increase efficiency.
The growing complexity of electrical infrastructure is driving the growth of automated switchgear technology. The importance of maintaining switchgears is increasing among several operators as they aid in power switching. With the increased construction of new facilities, the market for transfer switches and switchgears is expected to grow during the forecast period. However, the use of switches will vary significantly based on capacity supported, cost, mean time between failures (MTBF), switching time, and design.
Mechanical Infrastructure Insights
A majority of the data centers are adopting a combination of air and water-based cooling techniques to cool down the facility. Facilities in Shanghai are equipped with chilled water CRAC units and use energy-efficient free cooling techniques with redundant units. Some cities in China can facilitate free cooling for over 5,000 hours annually. The growth in the data center construction market in APAC will aid in the development of facilities that comprise multiple chillers, cooling towers, and CRAH units with N+N redundant configuration. Data centers are also designed with hot/cold aisle containment systems and equipped with a rack size of 42U. 42U rack units are the most commonly used ones, and they are expected to dominate the market during the forecast period. However, the market for rack units with a size of 45–48U is expected to witness growth during the forecast period. Data centers in Southeast Asia are designed to cool servers through water-based cooling techniques.
General Construction Insights
The high demand for hyperscale services is driving the market share of the building development segment. China is considered as one of the favorable site selections for the construction of multiple hyperscale facilities. The country offers an abundant land area and favorable climatic conditions, which are likely to attract investors to build their facilities during the forecast period. Beijing and Shanghai are the leading centers for data center operations. However, a majority of development is likely to be built in rural areas during the forecast period. Australia is witnessing an increase in the construction of Greenfield projects. Some of the major cities where greenfield developments to increase includes Perth, Canberra, Melbourne, Brisbane, and Sydney. Taylor Group and Benmax Group are among the major key players providing construction services in Australia.
Favorable government support in Southeast Asia countries has become a significant driver for the market. Governments in the region are providing suitable land for the development to boost and develop the digital economy. The labor cost in several APAC countries is low. The availability of construction service providers is high in these countries. Most facilities are designed to be of Tier III standards. For instance, Digital Realty, Equinix, and NTT communications have announced their facilities, which are designed with the Tier III standard.
Service Type Insights
The retail colocation segment continues to dominate the APAC market. In 2018, wholesale colocation services witnessed a high uptake among large enterprise businesses and cloud providers. The market will continue to gain traction during the forecast period on account of the emergence of artificial intelligence (AI) and big data technology among industries. Retail colocation services are likely to grow as several enterprises in Southeast Asia are shifting from traditional server room infrastructure to data centers. However, the adoption of in-house prefabricated solutions by enterprises and government agencies in the region is likely to pose a challenge to the retail colocation market.
Wholesale services are estimated to experience increased adoption during the forecast period. With the increased construction of wholesale colocation space in China, Hong Kong, Australia, Singapore, Japan, and India, service providers offer customized wholesale colocation solutions, where the pre-leased customer can work with the service provider to design and develop the facility according to the customer’s IT infrastructure operational requirement. Moreover, the development of multiple mega and hyperscale projects across the region is increasing, supporting wholesale colocation demand.
China & Hong Kong are the major destinations in the APAC region. The increasing demand for cloud, IoT, and Big data and other advanced technology services among enterprise business is leading the development of facilities in the region. The data center colocation market in Australia and New Zealand is growing at a considerable rate. However, the Australia market is witnessing higher investments from data center providers than New Zealand. The increasing adoption of renewable energy is expected to drive investment in Australia.
The Indian market is gaining traction due to the increase in the adoption of cloud-based services, IoT devices, big data, and artificial intelligence, and other advanced technologies. Singapore, Malaysia, Thailand, Indonesia, and Vietnam are major countries in the colocation markets in Southeast Asia. Singapore is a strong hub in Southeast Asia with the increasing number of the internet, cloud, telecommunications, and colocation service providers operating their facilities. The rise in submarine cable investments such as SEA-ME-WE 5, Trident Subsea Cable, Australia Singapore Cable, Indigo Cable System, and Indonesia Global Gateway Project will have high impact on growth during the forecast period.
Key Countries Profiled:
Key Vendor Analysis
The APAC data center colocation market witnessed an investment of around $4 billion through new and under construction facilities in January 2018. APAC countries have reflected the incredible development trajectory over the previous few years, and the region is expected to attract more investment during the forecast period. GDS Services, NTT Communications are the major investors. Equinix, Tecent, Global Switch, and Digital Realty invested over $200 million in the data center development in the APAC region.
The market also witnessed an increased investment from players such as NEXT DC, CtrlS, Keppel Data Centers, ST Telemedia, CyrusOne, ST Telemedia, and Sify Technologies. Leading cloud service providers are partnering with colocation providers to open cloud regions in APAC countries. This trend will continue during the forecast period and is likely to become competitive in terms of operations by 2024. In addition, Colt DCS, a leading colocation service provider is coming up with its new hyperscale facility in Mumbai, India with an estimated investment of around $300 million.
INET (Thailand), VADS BERHAD (Malaysia), and AirTrunk (Australia & Singapore) are developing mega facilities in the APAC region. ST Telemedia invested in Defu 2 facility in Singapore, and DCI Indonesia is also expanding its presence in the region. Modular service developers are like to focus on APAC. Huawei is a leading modular service provider in the region. Huawei, along with Keppel Data Centers, is investing in Singapore facility.
Key Company Profiles
Other Prominent Vendors – 21Vianet, AIMS Data Centre, Bharti Airtel (Nxtra Data), Biznet Data Center, Bridge Data Centres, Canberra Data Centres, Chayora Holdings Limited, China Mobile, China Unicom, CMC Telecom, Chunghwa Telecom (CHT), Colt Data Services, CtrlS, Cyxtera Technologies, Datacom, DCI Indonesia, Fujitsu, Graha Teknologi Nusantara (GTN), Indosat Ooredoo (Lintasarta), Internet Thailand Public Company Limited (INET), Keppel DC, Kepstar Data Center Management, Mapletree Investments, Naver, PT Telekomunikasi Group, Pulse DC, KT Corp., OneAsia Network, PCCW Solutions, Philippine Long-Distance Telephone ALPHA (PLDT ALPHA), Pi DATACENTERS, Reliance Communications (Global Cloud Xchange), Sify Technology, Singtel, Sinnet, ST Telemedia Global Data Centers (STT GDC), SUNeVison (iAdvantage), T.C.C. Technology (TCCtech), Telehouse (KDDI), Telstra, True Internet Data Center (TRUE IDC), VADS Berhad, VNTT, Vocus Communications, and XL Axiata
Key Market Insights Include
The report provides the following insights into the APAC data center colocation market for the forecast period 2019–2024.
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