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APAC Data Center Colocation Market Size, Share, & Trends Analysis Report by Electrical Infrastructure (UPS Systems, Generators, Transfer Switches and Switchgears, PDUs, and Other Electrical Infrastructure), Mechanical Infrastructure (Cooling Systems (CRAC & CRAH Units, Chiller Units, Cooling Towers & Dry Coolers, Economizer & Evaporative Coolers, Other Units), Racks, Other Mechanical Infrastructure, and Cooling Technique (Air-based Cooling and Liquid-based Cooling Technique)), General Construction (Building Development, Installation & Commissioning Services, Building Design, Physical Security, and DCIM), Service Type (Retail and Wholesale), and Geography (APAC (China & Hong Kong (CHK), Australia & New Zealand (ANZ), India, Japan, Rest of APAC, Southeast Asia (SEA), Singapore, Indonesia, Malaysia, Thailand, and Other SEA Countries)), Industry Analysis Report, Regional Outlook, Growth Trends, Competitive Landscape, Share & Forecast, 2020–2025
|MARKET SIZE (REVENUE)||USD 8.4 BILLION (2025)|
|MARKET SIZE (AREA)||8.15 MN SQ.FT. (2025)|
|Market Segments||Electrical Infrastructure (UPS Systems, Generators, Transfer Switches and Switchgears, PDUs, and Other Electrical Infrastructure), Mechanical Infrastructure (Cooling Systems (CRAC & CRAH Units, Chiller Units, Cooling Towers & Dry Coolers, Economizer & Evaporative Coolers, Other Units), Racks, Other Mechanical Infrastructure, and Cooling Technique (Air-based Cooling and Liquid-based Cooling Technique)), General Construction (Building Development, Installation & Commissioning Services, Building Design, Physical Security, and DCIM), Service Type (Retail and Wholesale)|
|Countries Covered||China & Hong Kong (CHK), Australia & New Zealand (ANZ), India, Japan, Rest of APAC, Southeast Asia (SEA), Singapore, Indonesia, Malaysia, Thailand, and Other SEA Countries|
The APAC data center colocation market size to reach USD 8.4 billion by 2025, growing at a CAGR of 5% during the forecast period. The APAC data center colocation market is witnessing growth due to the increased physical presence of hyperscale service operators in the region. The market is expected to observe an increase in the deployment of edge data centers post 2022 due to the growth in the use of connected devices among businesses and consumers.
Telecommunication operators in China are expected to lead the way with the construction of edge data centers. Major data center providers, including hyperscale providers, are likely to invest in edge data center infrastructure during the forecast period. The colocation demand is also aiding in the growth of services such as cloud connectivity, interconnection, and hybrid infrastructure services. Adopting cloud connectivity solutions will grow at a CAGR of 40% in countries such as Australia, New Zealand, China, India, Singapore, Japan, Indonesia, South Korea, and Hong Kong.
The rise in colocation demand across several industries has driven service providers to sign several M&A contracts to expand their portfolios. Besides, the market is experiencing the acquisition of data centers by real estate and investment firms. Such acquisitions are followed by expansion, leading to the healthy growth of the APAC data center colocation market. Apart from mergers and acquisitions, the major catalyst to market growth is the rise in joint ventures among leading vendors. In December 2018, ST Telemedia GDC and TICON Finalise entered into a joint venture to build the first data center in Thailand. In 2019, Adani Enterprises and Digital Realty partnered to develop and operate a data center in India.
This research report includes a detailed segmentation by
Several data center facilities in APAC with power capacities of more than 10 MW are expected to adopt over 500 kVA capacity UPS systems. However, the service providers are also investing in DRUPS systems with capacities of around 1,500 kVA to power their facilities. Colocation providers in Southeast Asia data center market are the major revenue contributors to the power infrastructure industry. Modular facilities deployed in the region will procure single-phase lithium-ion UPS systems. Also, large facilities will procure lithium-ion UPS to avoid high OPEX through the maintenance of VRLA systems. Mega data center projects in China & Hong Kong are increasingly deploying 2N redundant UPS systems. Since most vendors offer lithium-ion-based UPS systems, the APAC data center colocation market is expected to become highly competitive during the forecast period.
In China and Hong Kong, most data centers adopt a combination of air and water-based cooling techniques for cooling purposes. A few facilities are built to support free cooling techniques. The adoption of CRAC units and chillers will continue to grow in China and Hong Kong. The facilities located in Australia majorly adopt free cooling solutions. The trend of using free cooling solutions is likely to continue during the forecast period. In New Zealand, the use of free cooling/air cooling solutions is expected to grow because climatic conditions are beneficial for the data center cooling market, leading to the adoption of free cooling solutions in the country.
Data centers in India mainly use air-based solutions, and few facilities are operating via water-based cooling systems. A few states in the country support free cooling up to 1,000 hours per year. However, the high air pollution level in major cities across India could prevent the adoption of free cooling solutions for operators. Several high-density operational facilities will consider water-based cooling systems, while small-scale deployments could still operate via air-based cooling systems in the country.
In Southeast Asia, there is a high demand for efficient cooling solutions, which can provide adequate cooling at minimal costs. As the region does not facilitate free cooling, the adoption of energy-efficient chillers and cooling towers will grow. Innovative cooling techniques and systems will also experience a high adoption as they aid in reducing OPEX by up to 50%. Hence, increased innovations in cooling infrastructure are expected to reduce the cooling cost considerably in the region during the forecast period.
China is witnessing growth in greenfield data centers construction. In Hong Kong, on the other hand, there will be more brownfield developments due to the shortage of land during the forecast period. In terms of physical security, most facilities use four-layered physical security with on-site security personnel. The need for DCIM software to monitor facilities will continue to grow among existing facilities, and new data centers are likely to be part of the investment. The market in Japan witnessed an increase in general construction and is likely to continue on account of increased demand for data services. The cost of developing data centers, especially in Japan, is high along with the procurement cost of land. The Indonesian market is expected to witness a rise in the construction of greenfield projects with a power capacity of over 5 MW. The cost of construction averages around $4 million. However, it will differ based on the installation of infrastructure and the corresponding redundancy. The increasing construction of new facilities will provide several opportunities for local contractors to gain expertise in building data centers.
Retail colocation services in APAC are likely to grow as several developing countries are shifting from traditional server room infrastructure to data centers. However, the adoption of in-house prefabricated data center solutions by enterprises and government agencies in the region is likely to pose a challenge to the retail colocation market. These solutions provide more control over operations at reduced CAPEX. However, the lack of fundamental prerequisites such as high-speed fiber connectivity and disaster recovery locations to operate in-house prefabricated facilities will drive enterprises to consider managed retail colocation as the best alternative, thereby leading to steady growth of the retail colocation market during the forecast period.
The adoption of wholesale colocation services is witnessing steady growth in the APAC data center colocation market. The growth is leading by the high demand for cloud-based services, IoT, and big data analytics. Global enterprises, cloud providers, big data, and IoT organizations in the region are spending on these technologies. A majority of wholesale colocation space is completed within five years, comprising multiple data center buildings in the same location. With the increasing demand for cloud solutions among leading cloud service providers, the need for wholesale colocation space will continue to grow during the forecast period.
In the APAC region, China & Hong Kong are the prominent markets for data center operations. China & Hong Kong will exceed supply due to the increasing demand for cloud-based services, big data analytics, and IoT. China is the world’s largest IoT market, with 64% of 1.5 billion global cellular connections. The government has set a goal of enabling more than 1.7 billion public machine-to-machine connections by 2020; with this, the IoT market in China is likely to reach revenue of $200 billion by 2020. This will boost the construction of mega and large colocation facilities and prompt regional cloud service providers to establish multiple availability zones across the country as the demand for hybrid infrastructure services increases. Besides, there is a high demand for cryptocurrency data centers in China, boosting the development of high-performance computing infrastructure. The mega data center projects in China & Hong Kong are designed to be of Tier III and Tier IV standards, with the increased deployment of 2N redundant UPS systems.
Chinese data center colocation service providers such as GDS Services, Tenglong Holding, ChinData, Shanghai Athub, and 21Vianet invest billions of dollars towards new facility development. Throughout the APAC region, there are more than 50 data center projects with a power capacity of more than 10 MW. GDS Holding invested in more than 15 facilities that were opened and under construction in 2019, with an estimated power capacity of 240 MW. New entrants are fueling the need for hyperscale facilities in APAC. This includes Chayora, SpaceDC, Yotta Infrastructure, Regal Orion, Princeton Digital Group (PDG), and BDx (Big Data Exchange). Existing service providers are expanding their presence across many major markets, namely, AiTrunk (Singapore & Hong Kong), Bridge Data Centers (India), Equinix (India), Colt DCS (India), ST Telemedia (Thailand), and Kepple DC REIT (Indonesia). Most countries in the APAC region have a low cost of construction, reducing per MW investments to around $4–5 million for Tier III facilities. However, Singapore, Hong Kong, Japan, and Australia are the exception, as the development cost is over $7 million for a new project.
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