Hyperscale Investment to Increase Wholesale Spaces in the APAC Colocation Market


Arizton’s recent market research report on the APAC colocation market provides comprehensive industry analysis, trend forecasts, and competitive analysis. The research study segments the market by investment (electrical infrastructure, mechanical infrastructure, and general construction), by service type (retail and wholesale), by geography (China & Hong Kong, Australia & New Zealand, Southeast Asia, & Rest of APAC),and offers detailed competitive analysis.

The APAC colocation market is expected to record investments of approximately $10 billion by 2023, growing at a CAGR of over 12% during 2017-2023.

The research report offers market size analysis regarding colocation services during the forecast period. The increasing focus to reduce CAPEX and OPEX factors such as operating green facilities, high-density IT infrastructure, and hybrid infrastructure services is propelling the growth of the APAC market. The service providers are offering colocation, managed services, interconnection, and cloud connectivity solutions to gain a larger APAC colocation market share.

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The top 3 drivers and trends contributing to the growth of the APAC colocation market are discussed below:

Tax Incentives Will Boost Hyperscale Deployments

The state and local governments are offering investments, job creation, and sales tax incentives to attract a maximum number of operators in the APAC colocation market. These tax breaks are yielding millions of dollars in savings for hyperscale datacenter operators in the market. Singapore Economic Development Board (EDB) is offering tax breaks for foreign direct investment (FDI) that will result in increased investments and create jobs for locals in the APAC colocation market. The tax incentives offered by Hong Kong government caters primarily for investments that are aimed at brownfield developments of converting industrial buildings into efficient datacenters in the market. Multiple development projects will get tax incentives in the APAC region through the creation of local jobs and the need for governments to grow the digital economy. The government agencies and regulatory bodies are also allocation area for construction of new facilities in the APAC market. Hong Kong is allocating an area to develop facilities such as the Tseung Kwan O Industrial Estate, and Singapore has allocated the Singapore Data Center Park for new facilities. Such incentives will boost investments and revenues in the APAC market. The availability of renewable energy will also act as a driving factor luring operators in the market. Reliable power supply, availability of water for cooling, and the presence of fiber connectivity will boost hyperscale development and growth of the APAC colocation market.

ReadHyperscale Data Center Market in APAC- Industry Outlook and Forecast 2020-2025

Migration from in-house Infrastructure to Colocation Facility is Driving the Service Demand

Leading colocation providers are investing in mega datacenter facilities spanning hundreds of acres thereby, driving the demand in the APAC colocation market. These investments are leading to the construction of retail and wholesale colocation spaces in the APAC market. Leading companies such as GDS Holding, Chayora, Sinnet, Equinix, Global Switch, and iAdvantage are the major investors in the APAC colocation market. China and Hong Kong are the largest revenues generators with 15 new colocation facilities and expansion projects in 2017. The increasing demand for cloud and big data solutions will lead to the construction of new facilities in Singapore.

The initiatives implemented by the Southeast Asian government to improve the digital economy of the country will augment the development of the APAC market during the forecast period.

In 2017, major colocation investment in the SEA came Singtel, Equinix, PLDT, ST Telemedia, VADS BERHAD, Switch (SUPERNAP) and CMC Telecom.Japan, India, South Korea, and Taiwan are also experiencing an increase in investments through FDI and M&A activities. Such initiatives will lead to the development of innovative infrastructure solutions in the APAC colocation market.

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Increase in submarine fiber cable deployments

Government organizations are partnering with local telecommunication providers and global enterprises to improve internet services, thereby driving the growth of the APAC colocation market. The increasing adoption of technologies such as cloud, big data, and IoT is fueling the need for strong fixed broadband connectivity in the market. Government entities are also improving their wireless connectivity through the deployment of high-speed 4G LTE networks. Such strong network requirements will lead to the development of the submarine cable projects in the APAC colocation market. Multiple countries in the region are upgrading their networks to 5G-ready. Various countries in the region are developing submarine fiber cables that can transmit data at higher speeds with reduced latency.

Google is developing around ten submarine cable projects between 2016 and 2019.

The increasing number of these submarine projects will augment the growth of the APAC colocation market over the next few years.

The leading vendors in the APAC colocation market are 21Vianet (Century Internet Data Center), China Telecom Global, Equinix, GDS Holdings Limited, Global Switch, NTT Communications, and Singtel.

The complete overview of the latest market research report on APAC colocation market by Arizton is now available.

The report also offers a detailed study of major trends, drivers, challenges, and also provides the market size and forecast for major geographical regions and key countries.

Read Our Latest Report: Data Center Colocation Market - Global Outlook and Forecast 2020-2025

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