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Data Center Construction Market in Southeast Asia - Connectivity and Cloud Services are the Major Growth Drivers

Published date : Mar-2019

The government is investing millions of dollars to improve its digital economy in the data center construction market in Southeast Asia.


Arizton’s recent market research report on the data center construction market in Southeast Asia provides comprehensive industry analysis, trend forecasts, and competitive analysis. The research study segments the market 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).

The Southeast Asia data center construction market is predicted to reach values of approximately $2 billion, growing at a CAGR of around 7% during 2019-2024.

In Southeast Asia, Singapore is a mature market that accounts for over half of the investments, followed by Malaysia, Thailand, and Indonesia. The adoption of cloud-based services will be the major driver for the market over the next few years. The research report also offers market size in square ft area and power capacity in megawatts (MW) across geographies.

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The top three drivers and trends propelling the data center construction market in Southeast Asia are discussed below:

Increased adoption of cloud-based services in the Southeast Asia market

The digitalization of business operations is driving the demand for cloud-based service adoption in Southeast Asia. Among these countries, Singapore is the only mature cloud market in Southeast Asia. Most of the cloud data center deployments are carried out through data center colocation facilities in Southeast Asia. The global service providers are also establishing a physical presence in Southeast Asian countries such as Thailand, Indonesia, the Philippines, and Vietnam to gain market dominance.

For instance, Alibaba established its first facility in Indonesia in 2018 owing to the increased demand for its services.

In Southeast Asia, telecommunication service providers such as Singtel, NTT Communication, PLDT, and Telkom Indonesia have a strong presence in the cloud market. These providers also offer cloud connectivity solutions through their data centers for customers using cloud platforms of global providers to extend their reach in the market.

IaaS and SaaS are the largest contributors to the market revenue as compared to PaaS.

Growing awareness among government bodies to improve the digital economy

The government is investing millions of dollars to improve its digital economy in the data center construction market in Southeast Asia. The governments have created an entity to aid in the growth of the digital economy that includes increasing network capacity, aiding business to adopt the technology, and encourage global data center investments into the country. Singapore is making significant investments in connected reality targeting four areas: artificial intelligence, virtual reality, internet of things, and cyber security to grow its digital economy. In Thailand, the government launched the “Thailand 4.0” initiative in 2016 to grow the digital economy of the country. The Digital Economy (IDE) Hub was created to accelerate the adoption of digital technology in Indonesia. The backbone for digital economy growth is the rising internet penetration, smartphone usage, and online services like e-commerce.

Increasing investment in fiber connectivity

Government entities in Southeast Asia are strengthening their internet backbone in partnerships with local telecommunication providers and global enterprises. With the increasing adoption of technologies such as cloud, big data, and IoT, the need for strong fixed broadband connectivity has increased over the past five years. Government entities are also attracting foreign direct investment (FDI) from data center service providers to strengthen their internet connectivity, as it is considered to be among the major data center site selection criteria. Telecommunication providers are also developing submarine fiber cables that can transmit data at higher speeds with reduced latency. There are multiple submarine fiber cable projects that are recently opened, planned, and under-construction in Southeast Asia.

The major infrastructure providers of data center construction market in Southeast Asia market are 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, and Rittal.

The major construction companies are 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), and Sato Kogyo.

The major data center investors of data center construction market in Southeast Asia market are 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, and XL Axiata.

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The complete overview of the latest market research report on the data center construction market in Southeast Asia 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.

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