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Data Center Construction Market in Southeast Asia - Industry Outlook and Forecast 2019-2024

1st Edition

SKU : ARZ190215
  • Published on : March 2019

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This market research report on the Southeast Asia data center construction market offers analysis on market size & forecast, market share, industry trends, growth drivers, and vendor analysis. The market study also includes insights on segmentation by electrical infrastructure (UPS systems, generators, transfer switches & switchgear, rack PDU, and other electrical infrastructure), by mechanical infrastructure (cooling systems, racks, and other infrastructure), by general construction (building development, installations and commissioning services, building designs, physical security, and DCIM), by tier standards (Tier I & II, Tier III, and Tier IV), and by country (Indonesia, Malaysia, Singapore, Thailand, and other countries).

Southeast Asia Data Center Construction Market - Overview

The more than 50 times increase in data generation due to smartphone social media, wearable devices, and connected devices penetration is fueling the growth of the Southeast Asia data center construction market. The past decade has witnessed significant technological advancements specifically in the field of cloud computing, big data, and the internet of things (IoT). The increasing penetration of the internet and the use of various social media channels across Southeast Asia is contributing to the development of the market in the region. The growing investments by telecommunication providers, data center colocation providers, and data center REIT’s is contributing to the investments in the Southeast Asia market. Leading cloud service providers such as AWS, Microsoft, Google, Alibaba, Tencent, China Telecom, IBM and Oracle are operating cloud regions in the market. The colocation providers are involved in the construction of large facilities to colocate space to the cloud service providers to serve the immediate demand in the market. In Southeast Asia, Singapore is the mature market that contributes over 50% of the investment, followed by Malaysia, Thailand, and Indonesia. The increasing use of smart devices and significant development of big data, IoT and artificial intelligence, and virtual reality will propel the need for large data processing facilities in the market. Singapore will be the first country to implement 5G technology, which will be followed by other countries at the end of the forecast period, thereby driving the growth of the Southeast Asia data center construction market. The investment in submarine fiber cables at an increased capacity of over 50 Tbps will continue to grow in the market. The government agencies in countries such as Indonesia and Vietnam are planning to impose data protection laws thereby fueling the investments in the Southeast Asia data center construction market.

The investment support from REITs will enable growth of infrastructure by local vendors and incentives from the government will be highly beneficial for continuous investment from both local and global data center developers in the Southeast Asian market. The Southeast Asia data center construction market is expected to reach values of approximately $2 billion by 2024, growing at a CAGR of around 7% during 2018-2024. The research report also offers market size in square ft area and power capacity in megawatts (MW) across geographies.

Southeast Asia Data Center Construction Market – Dynamics

The increasing investments in inland and submarine fiber connectivity are propelling the growth of the Southeast Asia data center construction market. Several government entities are focusing on strengthening their internet backbone by forming partnerships with local telecommunication providers and global enterprises in the market. The deployment of high-speed 4G LTE networks will improve wireless connectivity and encourage investments in the Southeast Asian market. Government entities are also attracting foreign direct investment (FDI) from data center service providers by strengthening their internet connectivity in the Southeast Asia data center construction market. Telecommunication providers are also developing submarine fiber cables that can transmit data at higher speeds with reduced latency and is augmenting the deployment of cloud region by global service providers in the market. The growing need for high-speed interconnection services that require high capacity submarine cable projects will positively impact the growth of the Southeast Asia data center construction market. In October 2016, Pacific Light Data Communication, Google, and Facebook launched the Pacific Light Cable Network (PLCN) project of submarine fiber cables covering Philippines, Hong Kong, USA, and Taiwan at a capacity of 144 Tbps expected to finish by June 2019.

Southeast Asia Data Center Construction Market – Segmentation

This market research report includes a detailed segmentation of the market by electrical infrastructure, mechanical infrastructure, tier standards, general construction, and country.

Data Center Construction in Southeast Asia - Market Segments

Southeast Asia Data Center Construction Market – By Electrical Infrastructure

Power reliability issues to increase investment on backup power systems in the Southeast Asia data center construction market

The Southeast Asia data center construction market by electrical infrastructure is classified into UPS systems, generators, transfer switches & switchgear, rack PDU, and other electrical infrastructure. Generators dominated the total market share in 2018, growing at a CAGR of more than 7% during the forecast period. The increasing adoption of generators by facilities operators is primarily to make sure that they operate at 100% availability irrespective of the change in incoming power from utility grids in the market. There are multiple areas in the region that suffer frequent power fluctuations and outages, thereby driving the demand for generators in the Southeast Asia data center construction market. The various countries in Southeast Asia are prone to natural disasters namely, cyclone, floods, and tsunami making it imperative to install generators in the market. Generators in facilities across the region are mostly procured to supply power backup in MWs and are designed with N+1 or N+N redundancy in Tier II and Tier III data centers. The leading vendors are installing generators that are designed with 2N+1 redundancy in Tier IV facilities, thereby contributing to revenues in the Southeast Asia data center construction market.

Flywheel-based UPS systems and lithium-ion UPS systems are gaining immense traction across several countries in the Southeast market. Switchgearcomprises a combination of switches, fuses, and circuit breakers to protect and isolate electrical infrastructure in the facilities in the market. The increasing innovations in the rack PDUs to reduce consumption and power outages will contribute to the growth in the Southeast Asia data center construction market.

Southeast Asia Data Center Construction Market – By Mechanical Infrastructure

The growth of POD centers will lead to rack level cooling installations in the Southeast Asia data center construction market

The mechanical infrastructure in the Southeast Asia data center construction market is categorized into cooling systems, racks, and other infrastructure. Racks are the fastest growing segment in the market, at a CAGR of over 9% during the forecast period. The installation of racks as pre-assembled infrastructure along with rack PDUs, rack-level UPS, and IT infrastructure is fueling the growth of this segment in the global market. The increasing investment in innovations leads to the growth of performance optimized data (POD) centers which in turn, is fueling the demand for rack-level installations in the Southeast Asia market. The 42U rack unit is most commonly used in facilities in the Southeast Asia market. In recent years, rack units of 45U, 47U and 48U are also installed in large capacities, and a single data center can comprise racks of different sizes in the market. The increasing number of innovations in the rack structure will create lucrative opportunities for top vendors operating in the Southeast Asia data center construction market.

Free-cooling is not facilitated in this region and operators are looking for efficient solutions to reduce their CAPEX and OPEX, conserve data center space, and reduce power supply to cooling units in the market. The use of liquid-based cooling technique installations will boost the demand for other mechanical infrastructure in the Southeast Asia data center construction market.

Southeast Asia Data Center Construction Market – By General Construction

Hyperscale datacenter development is expected to expand beyond Singapore in the Southeast Asia data center construction market

The Southeast Asia data center construction market by building development is segmented into building development, installations and commissioning services, building designs, physical security, and DCIM. Building development segment occupied the majority of the total market share in 2018, growing at a CAGR of more than 5% during the forecast period. Building development primarily focuses on site selection, preparation, and area construction and concrete-based data center building with windows in the market. The increasing number of modular data center deployment will include modular data center development includes site preparation, provision of fiber connectivity to the data center, and on-site sub-station construction thereby creating jobs for local contractors in the Southeast Asia market. Facebook’s investment in the construction of a greenfield facility in Singapore will lead to increased revenues in the Southeast Asia data center construction market.

The growing number of large and high-density facilities with several integrated infrastructures will drive the demand for installation and commissioning services in the market. Physical security systems that comprise sensors integrated with the existing DCIM solutions for real-time remote monitoring benefits will revolutionize the market. DCIM solutions offer features to control power consumption, improve efficiency, and increase operational capabilities in the Southeast Asia data center construction market.

Southeast Asia Data Center Construction Market – By Tier Standards

Uptime InstituteTier III and Tier IV will witness a marked increase in the Southeast Asia data center construction market

The standard tier segment in the Southeast Asia data center construction market is divided into Tier I &II, Tier III, and Tier IV. Tier IV facilities are the fastest growing segment in the Southeast market, at a CAGR of approximately 20% during the forecast period. The increasing number of hyperscale developers such as Facebook, Apple, Microsoft, and Google investing in Tier IV facilities is fueling the growth of this segment in the market. A number of Uptime Institute certified Tier IV certified facilities by design document would include Indonesia (5), Singapore (1), Thailand (1), and Myanmar (1). Some of the companies that have attained certification from Uptime Institute are Burst Network (Myanmar), Telin (Singapore), PTT Public Company Limited (Thailand), PT DCI (Indonesia), and PT. SIGMA CIPTA CARAKA (Indonesia). The increasing focus on deploying Tier IV facilities with 2N+1 redundant infrastructure will transform the Southeast Asia data center construction market.

In the SEA region, several under-developed projects fall under the Tier III category. Most of the new data centers 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 the demand arises. Such deployments will boost investments in the Southeast Asia data center construction market.

Southeast Asia Data Center Construction Market – By Country

Singapore continues as the major hub for facility construction in the Southeast Asia data center construction market

The Southeast Asia data center construction market by country is segmented into Indonesia, Malaysia, Singapore, Thailand, and other countries. Singapore dominated the majority of market share in 2018, growing at a CAGR of over 4% during the forecast period. The increasing investments by Equinix, Singtel, ST Telemedia, Global Switch, Digital Realty, Keppel Data Centres, NTT Communications, 1-Net, Kingsland Data Center, NTT Communications, and Starhub is augmenting the growth of Singapore in the Southeast market. Singapore government will migrate all its government systems to the cloud, where most sensitive government data will be stored in the government managed cloud platforms. Facebook has announced hyperscale data center construction in the country along with Google announcing the expansion of its existing facility. Such developments will help Singapore gain a higher share and attribute to the revenues in the Southeast Asia data center construction market.

Malaysia has over 30 data center colocation facilities, and the count is growing with the addition of around five data center projects every year in the market. TCC Technology, NTT Communications, KIRZ, Servenet Solution, True IDC, and SUPERNAP (Switch) Thailand are investors across Thailand and fueling the growth of the Southeast Asia data center construction market.

Key Vendor Analysis

The Southeast Asia data center construction market is prompting providers to improve the efficiency of the solution to attract the maximum number of consumers. Partnerships with local providers and modular datacenter offerings will enhance revenues for the vendors operating in the market. The need for local service providers in installation, commissioning, and maintenance services will create job opportunities in the market. The increasing focus on innovations and pricing will boost the intensity of the competition level in the Southeast Asia data center construction market.

The major vendors in the Southeast Asia market are:

  • Infrastructure Providers
    • ABB
    • Schneider Electric
    • Vertiv
    • Caterpillar
    • Cummins
    • Delta Group
    • Eaton
    • Euro-Diesel
    • Fuji Electric
    • HPE
    • Hitachi Hi-Rel Power Electronics
    • Hitec Power Protection
    • Huawei
    • KOHLER Group
    • Legrand Group
    • Mitsubishi Electric
    • MTU ONSITE ENERGY (Rolls-Royce Power Systems AG)
    • Piller Systems
    • Rittal
  • Construction Company
    • Arup
    • AWP Architects
    • CSF Group
    • DSCO Group
    • Fortis Construction
    • Faithful+Gould
    • Flex Enclosure
    • Kienta Engineering Construction
    • M+W Group (Excyte)
    • NTTFACILITIES Group
    • PM Group
    • Powerware Systems (PWS)
    • Sato Kogyo
  • Data Center Investors
    • AIMS Data Centre
    • Biznet Data Center
    • CMC Telecom
    • Colt DCS
    • DCI Indonesia
    • Digital Realty
    • Equinix
    • Global Switch
    • GRAHA TEKNOLOGI NUSANTARA (GTN)
    • Indosat Ooredoo (Lintasarta)
    • Internet Thailand Public Company Limited (INET)
    • Keppel DC
    • Kepstar Data Center Management
    • NTT Communications
    • Philippine Long-Distance Telephone (PLDT)
    • PT Telekomunikasi Indonesia
    • Singtel
    • ST Telemedia Global Data Centres (STT GDC)
    • TCC Technology
    • True Internet Data Center (True IDC)
    • VADS Berhad
    • VNTT
    • XL Axiata

Key market insights include

  1. The analysis of Southeast Asia data center construction market provides market size and growth rate for the forecast period 2019-2024.
  2. It offers comprehensive insights on current industry trends, trend forecast, and growth drivers about theSoutheast Asia data center construction market.
  3. The report provides the latest analysis of market share, growth drivers, challenges, and investment opportunities.
  4. It offers a complete overview of market segments and the regional outlook ofSoutheast Asia data center construction market.
  5. The report offers a detailed overview of the vendor landscape, competitive analysis, and critical market strategies to gain competitive advantage.

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