This research report on the APAC data center market covers sizing and forecast, share, industry trends, growth drivers, and vendor analysis. The study includes insights on the segmentation by Facility Type (small-sized, medium-sized, and hyperscale), Infrastructure (IT, electrical, and mechanical) IT Infrastructure (servers, storage, and network ) Electrical Infrastructure (uninterruptible power supply (UPS) systems, generators, power distribution units (PDU), transfer switches & switchgears, and other), Mechanical Infrastructure (cooling systems, racks, and other mechanical infrastructure), Cooling Systems (CRAC & CRAH units, chiller units, cooling towers, dry coolers & condensers, economizers and evaporative coolers, and other cooling units), Cooling Technique (air-based and liquid-based), General Construction (building development, installation and commissioning services, building designs, physical security, data center infrastructure management (DCIM) & building management systems (BMS)), Tier Standards (Tier I and II, Tier III, and Tier IV), and Geography (Singapore, Malaysia, Thailand, Indonesia, and Other Southeast Asian Countries).
The APAC data center market is witnessing steady growth with continued investments from hyperscale and cloud service providers. In 2019, China and Hong Kong led the market in terms of data center development, followed by India, Australia, Japan, and Singapore. Apart from these countries, Indonesia, Thailand, and Malaysia made a sizable contribution toward growth. The implementation of 5G has commenced in several countries, which will have a significant impact on the market with telecommunication providers partnering with service providers in establishing edge data centers throughout the forecast period. The market is also witnessing significant investments in submarine cable projects from telecommunication service providers, and government entities with hyperscale operates are continuing to invest millions in improving submarine connectivity across regions aiding in the growth.
The introduction of artificial intelligence and machine learning workloads is expected to contribute over 40% in the infrastructure investment in APAC by 2025. Artificial intelligence and machine learning workloads will increase the demand for liquid-immersion and direct-to-chip cooling techniques that can support the density of up to 200 kW. Over 30% of Australian enterprises are involved in the use of AI-based infrastructure solutions as experimental as well as production workloads. The average size of a facility in the APAC region has increased considerably in the last two years. Several operators are involved in land acquisitions for future development, which, in turn, is propelling growth. ODM infrastructure solutions and all-flash storage arrays contribution to the market will continue to grow.
The APAC data center market is expected to grow at a CAGR of over 3% during the period 2019–2025.
This research report includes detailed segmentation by IT infrastructure, electrical infrastructure, mechanical infrastructure, general construction, tier standards, and geography.
Insights by IT Infrastructure
With the adoption of IoT, artificial intelligence, and big data analytics, the demand for high-performance computing infrastructure is increasing. The demand for supercomputers is also increasing with the adoption increase in investment towards cryptocurrency mining. Moreover, the increasing development of facilities in China and Hong Kong and the implementation of a high-speed 5G network will boost the data center network market. Over 50% of the business IT budget is spent on the migration to cloud-based services in Australia, with IaaS spending leading the chart followed by SaaS. The Australian market will also witness the increased demand for managed data center services. IT infrastructure spending will be dominated by cloud-service providers.
The increasing adoption of IT infrastructure is a major driver in the data center market in India, with high adoption of servers, storage, and networking infrastructure. Around 70% of startups in India are adopting IoT in their business. Healthcare and manufacturing are popular verticals attracting a lot of investor interests. The IT Infrastructure market in Japan is gaining traction with the increasing popularity of cloud-based services, IoT, and AI. In Japan, the majority of facilities are having blade types of servers developed for the high-density computing environment. The increasing usage of social media platform in the region will lead to the development of new facilities to store data, which increase the demand for high-capacity storage solutions.
Insights by Electrical Infrastructure
The construction of data centers with power capacity over 20 MW will increase the demand for high-capacity electrical infrastructure. Most facilities support rack power density of 5−10 kW; however, it is expected that new facilities will support a capacity of up to 20 kW during the forecast period. Multiple facilities with a power capacity of more than 10 MW are being implemented in Australia. Data center providers are investing in DRUPS systems with a capacity of around 1,500 kVA. Service providers are featuring lithium-ion batteries, which are likely to increase adoption in the market. The market in India has witnessed the installation of energy-efficient power infrastructure. The contribution of the power infrastructure segment is high because of the growth in the installation of 2N power infrastructure solutions among extensive facilities. The operators are also being prompted to support renewable energy sources to power their IT infrastructure.
Insights by Mechanical Infrastructure
Several APAC countries do not support the use of free cooling systems. The operators in this region are still highly dependent on traditional air-based cooling techniques in small facilities that are built as part of commercial complexes. The use of dual water feeds in data centers with on-site water treatment plants is fast gaining popularity in the region as a few countries such as India suffer from acute water shortage for cooling purposes. The increasing demand for ASHRAE and Uptime Institute certified infrastructure is likely to increase the importance of metrics such as power usage effectiveness, water-usage effectiveness, and carbon usage effectiveness during the forecast period. The use of air-based cooling will continue to co-exist in the APAC region because of the growth of small facilities.
In China and Hong Kong, a majority of colocation data centers adopt a combination of air and water-based cooling techniques. The data centers in Australia majorly adopt free cooling solutions to cool the facility. The trend of using free cooling solutions is likely to grow during the forecast period to reduce water consumption as well as OPEX of the facility. In New Zealand, the trend of adoption of free cooling/air cooling will continue to grow because climatic conditions are proving beneficial, leading to the adoption of free cooling in the country. Data centers in India mainly use air-based cooling facilities. A few states in the country can support free cooling for up to 1,000 hours per year. The high air pollution levels in major cities across India and China might not make free cooling a feasible option for the operators.
Insights by General Construction
China is leading in greenfield construction. There will be more likely to have brownfield developments in Hong Kong due to the space shortage during the forecast period. In terms of physical security, most service providers prefer four layers of safety, with a few engaging in the implementation of five-layer ones due to the increasing demand for colocation services. Australia is witnessing an increase in the construction of greenfield data center projects. Perth, Canberra, Brisbane, and Sydney are some of the major cities in Australia, where greenfield development is likely to increase. The need for DCIM software to monitor facilities will continue to grow as the need to improve operational efficiency is growing. The general construction market will witness an increased construction of data centers in Japan. However, the cost of developing new facilities in the country is high. The rest of the APAC market will witness the entry of new construction services providers with greenfield construction growing. Telecommunication service providers and government agencies are the major investors in Southeast countries.
Multiple facilities are being developed in this region as part of commercial buildings in major cities. This scenario will change in the future years as more standalone data center developments will be witnessed in regions such as Southeast Asia, India, and Rest of APAC during the forecast period. However, with the increase in greenfield development, the need for skilled labor will also grow. The labor shortage is not higher in APAC countries than in European and American regions. Mega data center development will provide a major boost to the revenue growth for local construction contractors and suppliers.
Insights by Tier Standards
In the APAC region, several under-developed projects fall under the Tier III category. This trend is likely to continue during the forecast period, with many operators expected to move to the Tier IV category based on the growth in rack power density and critical applications. Data centers in Japan are likely to adopt the Uptime Institute’s Tier III or Tier IV design with a minimum of N+N redundancy across infrastructures. Most facilities developed were Tier III and Tier IV standards in 2019.
In terms of colocation, these facilities will cost higher on a per rack basis compared to Tier I and Tier II facilities. Most new facilities are being designed as per Tier III standards with a minimum of N+1 redundancy, which can be reconfigured with up to 2N+1 redundancy as and when required. Tier IV data centers are equipped with at least 2N+1 redundancy in every infrastructure that makes the facility fault-tolerant, with some facilities having 2N+2 redundancy in few critical infrastructures such as UPS systems and PDUs. The contribution to Tier IV facilities is higher among hyperscale developers such as Facebook, Apple, Microsoft, AWS, and Google. These facilities generate more revenue for the market, with focused investment on highly efficient infrastructure solutions. Tier IV facilities involve the adoption of 2N+1 cooling units.
Insights by Geography
The deployment of data centers in China & Hong Kong is likely to 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 the 1.5 billion global cellular connections. The market in Hong Kong is witnessing investments YOY, which is aiding the country to emerge as one of the major data center hubs in the world. The submarine cable deployment in Australia will boost facility growth. In 2019, submarine fiber cable projects were INDIGO-Central and INDIGO-West, which connect Australia, Indonesia, and Singapore will contribute to the increase in network traffic.
The data center market in India is one of the fastest-growing in the APAC region. India witnessed continuous investment in cloud adoption and big data analytics from small and medium-sized industries in 2019. Government initiatives such as Digital India are the major contributor to the data center investment growth in the market. The market has also witnessed an increase in the number of new service providers offering hosting, storage, colocation services, and disaster recovery services.
Japan has evolved as a global data center market is driven by global hyperscale cloud providers such as Amazon Web Services (AWS), Google, Microsoft Azure and IBM SoftLayer expanding in the Tokyo and Osaka markets. In Southeast Asian countries, Singapore is emerging as a strong hub with the internet, cloud, telecommunications, and colocation service providers operating facilities. Indonesia, Thailand, Malaysia, and the Philippines would be among the other major contributors to the growth in Southeast Asia during the forecast period.
Key Vendor Analysis
The APAC data center market is witnessing a steady growth in terms of IT infrastructure procurement, greenfield, brownfield, and modular data center development as well as the high adoption of efficient, scalable, flexible, and reliable infrastructure solutions.
Moreover, the market has a strong presence of vendors in the three categories: IT infrastructure, support infrastructure, and data center investors. From the IT infrastructure perspective, the contribution from APAC based infrastructure providers as well as global providers is almost equal. The increasing competition will prompt vendors to reduce the price of solutions, namely, SSD’s and Ethernet Switches to gain major shares. The market is witnessing the growth of data centers that are keen to reduce power and water consumption and decrease carbon dioxide emissions. This will increase the demand for energy-efficient and innovation power and cooling infrastructure solutions. Partnership with facility operators will play a vital role in gaining market share. It is because the majority of the providers in the regions have planned to invest millions of dollars in new facility development.
Key Data Center Critical (IT) Infrastructure Providers
Key Data Center Support Infrastructure Providers
Key Data Center Contractors
Key Data Center Investors
Other Prominent Critical (IT) Infrastructure Providers – Arista, Atos, Broadcom, Extreme Network, Hitachi Vantara, Inventec, Juniper, Lenovo, NEC, NetApp, Oracle, Pure Storage, Quanta Cloud Technology (Quanta Computer), Super Micro Computer, and Wistron (Wiwynn)
Other Prominent Support Infrastructure Providers – Airedale Air Conditioning, Alfa Laval, Asetek, Bosch Security Systems (Robert Bosch), Cyber Power Systems, Delta Group, Euro-Diesel (KINOLT), Green Revolution Cooling (GRC), Hitech Power Protection, KOHLER (SDMO), Legrand, Nlyte Software, Mitsubishi, MTU On Site Energy (Rolls-Royce Power Systems AG), Socomec, and Trane (Ingersoll Rand)
Other Prominent Construction Contractors – DPR Construction, Corgan, CSF Group, Cundall, Faithful+Gould, Flex Enclosure, Fortis Construction, Hutchinson Builders, ISG, Larsen & Turbo (L&T), Linesight, LSK Engineering, Nakano Corporation, Obayashi Corporation, and Red-Engineering
Other Prominent Data Center Investors - Bridge Data Centres, Canberra Data Centres, Chayora, China Unicom, CtrlS, FPT (Frasers Property Thailand), Global Switch, Internet Initiative Japan Inc. (IIJ), Keppel Data Centres, Neo Telemedia, Pi DATACENTERS, Reliance Communications (GLOBAL CLOUD XCHANGE), Sify Technologies, Space DC, Tenglong Holdings Group (Tamron), and Yotta Infrastructure
Key Market Insights Include
The report provides the following insights into the data center market in APAC during the forecast period 2020–2025.
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