Viet Nam is ranked the ninth most robust data centre market in Asia-Pacific, according to the Data Centre Competitive Index 2019 released this week by global real estate services firm Cushman & Wakefield.

Southeast Asia will be the fastest growing region for co-location data centres over the next five years, underpinned by the surge in demand for cloud-based services. — Photo vov.vn

According to Lynus Pook, Cushman & Wakefield director for leasing, the economically active population in the Southeast Asian markets of Viet Nam and Indonesia will spur increased IT consumption and growth in e-commerce and digital banking. Demand for data storage across Southeast Asia holds tremendous potential for data centre players.

However, he said, infrastructure in these markets is not fully developed, posing some challenges for providers.

Christine Li, Cushman & Wakefield head of research for Southeast Asia, said until infrastructure levels in Thailand, Indonesia and Viet Nam are well-developed to support the smooth operation of data centres, players will continue to tap both Singapore and these emerging markets.

Li warned they will favour Singapore for its relative security to store mission critical data, and store the business-as-usual non-mission critical data in the neighbouring countries.

According to the report, Southeast Asia will be the fastest growing region for co-location data centres over the next five years, with its market size expanding by a compounded annual growth rate (CAGR) of 13% during 2019-24.

This trend is underpinned by the rapid pace of digitalisation and surge in demand for cloud-based services across the region, which prompted big corporates such as Google, Alibaba Group, Amazon Web Services (AWS) to expand their cloud infrastructure footprint to facilitate the expansion.

The second fastest growing region is Asia Pacific, whose CAGR is expected at around 12% over the same period, higher than that of the Middle East (11.1%), Africa (11.1%) and North America (6.4%).

Currently, North America is the largest co-location data centre by market size, at 17.2 billionUS$.

However, Asia-Pacific is expected to take over the top spot in the next two years. The total market size for Asia-Pacific co-location data centres is forecast to be around $28 billion by 2024, 20% higher than the 23.4 billion$ market size projected for North America.

(Source: VNS)