APAC Data Center Market Landscape 2023-2028

The APAC data center market will witness investments of USD 96.85 billion by 2028, growing at a CAGR of 5.54% during the forecast period. The market is among the top markets globally in terms of growth, led by governments’ support for data center development, expansion of multiple industrial zones, the rapid development of submarine cable connectivity, investments by cloud service providers, entry of global colocation operators in the region for joint ventures (JVs), and other factors.

Rising 5G Deployments Are Driving the Growth of Edge Data Centers in the APAC Region

5G technology is adopted across the region in China, Australia, Japan, Singapore, South Korea, and other countries. High-computing power and increased connectivity standards drive the deployment of 5G across data centers in multiple locations. Some examples are mentioned below. For instance, In November 2022, the China government announced the allocation of the country’s first private 5G spectrum to the Commercial Aircraft Corporation of China (COMAC).

Growing Adoption of Innovative It Infrastructure Will Drive the Demand for Advanced Technologies in the IT Infrastructure Market
Some IT infrastructure trends witnessed in the industry include the adoption of NVMe storage, an increase in the adoption of 200/400 GbE ports, the adoption of ARM-based architecture, server virtualization, and the adoption of converged and hyper-converged infrastructure.

SEGMENTATION INSIGHTS

• Servers are available in a variety of types and configurations. Regarding form factors, servers are classified as rack, blade, and tower. The most common servers in the industry include rack and blade servers from vendors such as Cisco Systems, Hewlett Packard Enterprise, Dell Technologies, IBM, Lenovo, and NetApp.
• There is an increasing opportunity for vendors providing lithium-ion and nickel-zinc batteries used in UPS systems. Operators can also adopt new-age generator sets that run on hydrotreated vegetable oil (HVO), natural gas, etc.
• APAC data center market is witnessing the adoption of water- and air-based cooling solutions, with water-based cooling solutions witnessing major demand in Southeast Asia due to the tropical climate.

GEOGRAPHICAL ANALYSIS

• The APAC data center market is one of the significantly growing global markets, with a major contribution from countries such as China, Australia, India, and Japan, with other countries such as Hong Kong, South Korea, Taiwan, and New Zealand with growing data center activities.
• In Southeast Asia, Singapore witnessed a setback due to the moratorium on data center construction. The moratorium was lifted in 2022, and the industry is expected to get on track in the next 2-3 years.
• Other countries, such as Indonesia, Malaysia, and Thailand, are witnessing a sudden surge in demand, especially from the spillover of demand from Singapore after the moratorium. Countries such as Vietnam and the Philippines are among the markets expected to witness an increase in growth rate in the coming years.

VENDOR LANDSCAPE

• The APAC data center market has the presence of IT infrastructure vendors such as Arista Networks, Atos, Cisco Systems, Dell Technologies, Hewlett Packard Enterprise, IBM, Juniper Networks, and others. Vendors are continuously innovating their offerings to meet up with the industry demand.
• Enterprises are adopting flexible storage systems to improve the services' efficiency. Flash-based storage will increasingly be procured for critical applications, with traditional HDD storage used for non-critical applications.
• With the development of cloud data centers, the adoption of switches with ports varying from 25−100 GbE across multiple layers of the data center architecture will increase. Small facilities will migrate from 1 GbE to 10 GbE switches at ToR layers.