Cloud & Datacenters Magazine vol. #3 | W.Media Awards 2023

INVESTMENT

w.media

Editor’s Foreword Hello and welcome to the third edition of W.Media Cloud & Datacenter magazine. In this issue we will be looking back and celebrating the W.Media Asia Pacific Cloud & Datacenter Awards 2023, which saw the industry’s finest names come together in recognition of their collective accomplishments.

Taking place in the prestigious Kowloon Shangri-La Hotel in November, the bright lights of Hong Kong backlit the beautiful vista of Victoria Harbour for attendees. Inside the magazine we look at an overview of the event and highlight all those who won awards on the day. We also take a look at Hong Kong - the city that made the event as magical as it was.

More than just the awards however, as always we aim to cover a number of interesting areas and topics facing the industry, including an exclusive interview with Mr. Joonhwa Song, Director at the Korea Data Center Efficiency Association (KDCEA), to get his expert take on the issues facing the data center market in South Korea.

As always we would like to offer our heartfelt gratitude to all those who have made the magazine possible, from sponsors to contributors. In addition of course, we have to offer special thanks to all the guests, winners, sponsors and W.Media staff who made the November awards everything it turned out to be.

Karl Loomes

Deborah Grey

Hazel Moises

Editor in Chief

Regional Editor South Asia and Middle East

Senior Tech Journalist

w.media

TABLE OF CONTENTS

07

4

07

Q &A with Joonhwa Song from the KDCEA

10

Bridging the skills gap: Invest now to secure the

12

Asia Pacific Cloud & Datacenter Awards 2023

future

16

Data Center Outages: Expensive. Disruptive.

18

The Batam Story: From Surf and Sand to

Preventable?

Servers

10

16

12

24

20

Innovative solutions: The only way to meet demand in

22

The Interconnected Bond Between 5G Technology

the AI-driven era

and Data Centers in Malaysia

24

Hong Kong: Where Tradition Meets Innovation in

28

APAC Data Centers: Which way are the winds

the Heart of the Data Center Revolution

blowing?

5

The data center industry in South Korea has been seeing a lot of pressure in recent years. In an exclusive interview with W.Media, we speak to Mr Joonhwa Song, Director at the Korea Data Center Efficiency Association (KDCEA), to get his insight.

Please start by telling us a little bit about yourself and your organization.

Q&A KDCEA

Joonhwa Song

However, with the rapid growth of the cloud service market in Korea over the past three or four years, global CSPs have become major customers in the Korea data center market. The shift has led to a significant increase in demand for hyperscale data centers, thereby promoting the growth of the Korean data center industry. It has also become a key factor in attracting new data center players.

Hello, I’m Joonhwa Song, Director at Korea Data Center Efficiency Association. I have previously worked at Korea Data Center Council (KDCC) and Korea IT Service Industry Association (ITSA). With my understanding of the Korean data center industry and widely built network within the industry, I am now actively involved in policy development, market research, and educational initiatives to promote the growth of the Korean data center industry.

In the last two to three years, data centers in the Korean real estate market have gained attention as lucrative new investment opportunities. As a result, new players such as global data center specialists like Equinix, Digital Realty and Digital Edge, domestic asset management companies such as IGIS and Koramco, domestic construction firms like GS and E&C, and overseas capital such as Actis, GIC and Seraya, have all entered the market, intensifying the competition.

The KDCEA was established in February 2022 as a non-profit organization under the Ministry of Trade, Industry, and Energy (MOTIE). Approaching the 2020s, improvements in data center sustainability emerged as a major concern in the industry alongside its growth. The KDCEA was founded to facilitate the collaborative efforts of industry stakeholders for enhancing energy efficiency and sustainability within the Korean data center sector. There are currently 74 domestic and international data centers and their related solution companies as active members.

Could you perhaps give us a snapshot or overview of the data center industry in Korea? How many data centers there are, capacity, hyperscale vs edge, ongoing projects etc.?

As of the end of 2023, there are 39 colocation data centers in development or operational in South Korea, with a combined installation capacity of 515MW. In addition, there will be approximately 34 or more new colocation data center projects underway for the next 5 years. By the end of 2027, it is anticipated that the number of colocation data centers in Korea will exceed 73, with installed capacity expected to increase by over 1GW, reaching beyond 1.7GW total.

The newly constructed colocation data centers in Korea currently are predominantly being developed on a hyperscale level, primarily to address the demands of Cloud Service Providers (CSPs) and the rapid growth in AI services.

Most of the new projects are located within the Seoul Metropolitan Area (Seoul, Gyeonggi-do), due to the supply of power, network infrastructure, customers’ accessibility, and securing labor force of quality.

While there also is an anticipated increase in demand for edge data centers in the future, there hasn’t been a clear noticeable dynamic shift in the direction within Korea yet.

What kind of role does power availability and infrastructure play in the data center market in Korea?

You mention a preference for building in the Seoul Metropolitan Area (SMA), what role do population demographics play in this?

There are approximately 20 million people residing in the metropolitan area, over half the entire population of Korea. This makes factors such as high-quality infrastructure for data center development, customers’ accessibility, and access to skilled labor force crucial considerations for conducting data center businesses.

How has the data center market been developing in Korea in recent years? Is this changing and growing as we see in other countries? If so, why?

Over the past 30 years, the Korean data center market has been dominated by domestic telecommunication companies such as Korea Telecom (KT), and major corporations like Samsung and LG. Leveraging their robust telecommunications networks and substantial financial resources, they have consistently provided stable services, mainly retail, for their subsidiaries and customers.

Currently in Korea, power availability and the associated infrastructure such as transmission lines and substations, play a crucial role in developing a new data center. In the past, it was not as difficult for data center operators to receive new power from the Korea Electric Power Corporation (KEPCO) in the Seoul metropolitan area. However with the Korean government’s policy promoting the decentralization of data centers, this has become a challenging task.

The Korean government is pursuing a policy for the regional dispersion of data centers to alleviate the burden on the power system in the metropolitan area and promote balanced regional development. Since March of 2023, KEPCO has established legal grounds to reject applications for new power supplies of 5MW or more, such as those for data centers within the metropolitan area.

The primary rationale behind this policy is the imbalance in power demand and infrastructure investment between the metropolitan area and non-Seoul metropolitan area. The Seoul metropolitan area faces high power demand, but investing in infrastructure for new supply is challenging, whereas non-Seoul metropolitan areas have low power demand, leading to an imbalance where some regions cannot fully utilize locally produced electricity.

7

w.media Does this imbalance mean the infrastructure and power needs of the industry are not being met?

Data center operators are desiring the construction of new centers within the Seoul metropolitan area. With the government pursuing a policy of decentralization however, there is no plan for new supply of power within the metropolitan region. Therefore, at least until now, it can be considered that the industry’s demands are not being met.

Q&A KDCEA

Joonhwa Song

Do you think there is a lack of understanding in the general population about exactly what data centers are and how they work?

Once hailed as a global IT powerhouse, Korea continues to have a majority of it’s population owning smartphones and actively engaging with cloud and OTT services.

However, it is a fact that the Korean general public lacks a full understanding of data centers as crucial infrastructure for utilizing these services.

There is an imbalance in demand and supply of power and infrastructure, particularly in Seoul metropolitan region. In non-Seoul metropolitan areas, the power supply reserve ratio is generally substantially better.

Nonetheless, due to lower demand for new data center constructions in non-Seoul metropolitan areas, having more power supply reserves does not necessarily benefit the data center industry.

Despite the widespread use of IT services based on data center infrastructure in daily life, the unfortunate reality is that the perception of data centers among the general public in Korea tends to lean towards them being considered as harmful facilities generating electromagnetic waves and energy-consuming facilities consuming significant amounts of electricity.

How is the government, both national and local, as well as relevant agencies like KEPCO working with the data center industry? Are there areas they could be doing more to help?

The Korean government is not extensively involved in collaborating with the data center industry. Most of the policies pursued by the government primarily focus on supporting the growth of IT services such as cloud and AI. In my opinion, there seems to be limited interest by the government in the critical infrastructure, such as data centers, of these IT Services. Ironically, data centers are essential for the growth of the cloud and AI industries.

Local governments from non-Seoul metropolitan areas view data centers as a promising future industry and are active in attracting new data centers to bring in investment and increase jobs in their regions.

They often promote investment support policies, such as tax reduction, to attract data centers to their regions, and some of these local governments also collaborate with data center operators to build public data centers.

While KEPCO has established some channels for collaboration with the data center industry, it is primarily limited to supporting the decentralization. KEPCO supports the regional dispersion of data centers by connecting potential data center investors with local government officials.

8

We have talked a lot about power and the government’s decentralization policy, what other hurdles is the DC industry facing in Korea?

Other difficulties include obtaining complex building permits, which involve negotiations and time with local authorities, and high land prices.

Another unique phenomenon in Korea is the resistance from local residents.

When a new data center project is proposed in proximity to residential areas, there is a phenomenon of local residents expressing opposition with concerns about health risks of electromagnetic waves from underground transmission lines. This local resistance, often manifesting in complaints and protests, can lead to issues including project delays or even cancellations.

The negative perception of data centers among residents in Korea stems from the fact that, despite not only meeting the legal standards for electro magnetic waves set by the South Korean government through various cases and measurements but also not presenting a clear evidence internationally regarding electro magnetic waves causing harm to human health, the residents are skeptical about the potential of electromagnetic waves causing cancer.

Addressing this issue is a challenge that both KDCEA and the Korean data center industry need to collaboratively tackle in the future.

How do you think these fears could be alleviated? What would you explain to concerned residents?

The method to alleviate concerns about electromagnetic fields (EMF) near data centers involves establishing EMF tolerance standards based on scientific principles, presenting measurements from actual data center vicinity, and persuading and alleviating public anxieties.

The EMF hazard standard set by the Korean government is 83.3 microteslas (uT), a value in compliance with international standards. There has not yet been a case where EMF measurements around certain data centers in Korea exceed the legally established standards set by the government.

KEPCO has published measurements of electromagnetic fields from underground transmission lines of 154kV. Measurements directly above the lines recorded 0.59 uT, while at a location 40 meters away, the measurement was below half of that, at 0.2 uT, indicating significantly lower values than the legal standards.

The World Health Organization’s International Agency for Research on Cancer (IARC) classifies EMF as a Group 2B substance, indicating it is a possible human carcinogen. However, it’s crucial to note that Group 2B includes common items in our daily lives such as coffee, kimchi, and the EMF emitted by smartphones. In other words, EMF is considered to have a slight potential for causing cancer but is not directly proven to be carcinogenic.

How would you summarize the industry’s success in working with and educating government agencies to help address all these concerns we have discussed today?

The Korean data center industry and its operators convey various opinions to the government either independently or through the representation of the association, in efforts to collaborate or contribute to industry growth.

However, there is a prevailing sentiment that the efforts haven’t been sufficient in enhancing the understanding of data centers among government agencies and related stakeholders. Addressing these concerns is also a challenge that both KDCEA and Korean data center industry need to collectively tackle moving forward.

9

w.media

Bridging the skills gap: Invest now to secure the future

The industry has seen the writing on the wall for a long time - the ability to find qualified individuals interested in data center roles is just not keeping pace with the rapid increase in demand in the sector. Talk of a ‘silver tsunami’, as a whole generation of DC talent approaches retirement, looks set to make things harder just at a time when AI, the cloud, and 5G, are all converging to drive the need for computing power higher at an exponential rate.

The issue is a global one, and while the numbers vary depending on the report you read, all are consistent in their assessment - the skills gap is causing pressure right now.

Such a complex problem obviously has no one, single solution, but the industry has to look inwards if it wants to secure its future. One clear way of doing this, and one which many operators are already looking at, is through training. This takes money of course, but as is often the case, investment is needed now in order to secure the future.

A demand and supply problem It is easy to focus on the supply side of the skills gap problem - there are not enough qualified people to fulfill all the roles. However it is always worth keeping in mind that this is really a problem because of the massive increase in data center builds, capacity and computing power that the world has been undergoing. It is not that there is no new talent being brought onboard, more that it is being outstripped by the sector’s growth.

The supply side is the area that operators and businesses can have the most direct impact on however, but to do that efficiently, we need to use the right language.

10

Education, skills and experience The truth is that while we usually refer to a ‘skills’ gap, in many cases this is not actually the problem - or at least it is only part of the problem. In this industry, many of those skills that are required can only be learned through experience.

It is true that students can be educated in related subjects, and talent from adjacent fields can be brought on board, but as with most practical applications, there is just no replacement for years in the business.

One often cited criticism of university education is that it is, by definition, academic. Students in all fields gain qualifications that often help very little when it comes to the real world. The foundations taught at university are necessary of course, but a fresh electrical or mechanical engineering graduate, even if they had achieved the highest level of education at the best institution, would not be able to work alone in data center operations on day one.

And this is a problem, because the roles that are being filled are often mission critical, and downtime is not an option. We are talking about businesses whose end goal is to make a profit. You hire people TODAY because you need them to do the job TODAY. It may seem short sighted but it is the practical reality of any company.

Effectively the only option is to hire qualified people from competitors, driving up the salary costs. At the same time, the available talent pool is shrinking as more and more individuals retire.

There is no way to bridge an ‘experience gap’, but if the industry wants to increase this talent pool of qualified people, there is one practical solution that is to some extent already underway - training.

Train and retrain Broadly speaking, this can take place in two main ways. Firstly, training new, young talent, in the practical skills required to work in the industry, whether they be engineering graduates or not. The other is to retrain those who have worked in adjacent fields, perhaps with many years of experience, but without the very specific skill set required to work in data centers.

This training costs money, and whether it is done in-house or by a third party, if operators want a qualified workforce now and in years to come, the investment needs to be made.

It is also worth noting that while training may cost money, it is cheaper in the long run than driving the salary costs of a small (and shrinking) talent pool higher. It is also far cheaper than the problems that can arise by having under-qualified staff working in mission critical roles.

According to Dean Coetzee, Chief Operating Officer (COO) at the DC training and services company EPI, there is still a large shortfall when it comes to the industry spending money in this area. He believes that if operators want to bridge this skills gap, then they need to invest far more aggressively in training than they currently do.

Regional differences Though the skills gap is impacting the industry across the board, there are certain regional differences that can both help and hinder the problem. According to Coetzee, developing markets in particular suffer worse, as they often lack the skills base to support the industry. This can lead to the import of talent from abroad.

There is interest there however, and indeed he notes that a large percentage of applicants for EPI’s Data Center Futurist Scholarship programme are coming from such regions, notably South Asia and the Middle East.

On the other side, countries where the data center industry is more established and growing bring with it their own benefits.

While this growth exacerbates the problem of demand, it also means more opportunities for practical experience.

“There is no replacement for practical experience, and there never will be.” says Coetzee, and the more capital that is invested, the more projects that are built, the more opportunity there is on the ground for people to develop the skills needed. Experience in terms of years may be lacking, but experience in terms of projects worked on will catch up.

Here Coetzee cites Malaysia as a prime example. The country has a tech-savvy population, with significant benefits in geography when it comes to DCs and infrastructure. With the moratorium in neighboring Singapore, Malaysia saw interest and investment in the industry grow, offering a perfect opportunity to help close the gap.

Hindsight offers perfect vision It could reasonably be argued that if the industry had been investing in this kind of training in the past, there would be no skills gap to speak of. But it is always easier to look back and see what could have been done, than to actually do it at the time.

Investment in the future, whether in terms of time or money, always sees a tradeoff with the current business needs. Sometimes it can be hard to think of tomorrow when you are trying to achieve the best you can today.

Experience is a cruel teacher however - first giving you the test, then the lesson. The industry needs to learn from the experience of where it stands now, investing in training and retraining before the gap becomes too wide to bridge.

11

w.media

Asia Pacific Cloud & Datacenter Awards 2023 On the 30th November last year, it was W.Media’s great pleasure to host the third annual Asia Pacific Cloud & Datacenter Awards at the prestigious Kowloon Shangri-La Hotel in Hong Kong. The event brings together some of the industry’s finest companies, leaders and innovators, in recognition of the excellence and great achievements that they bring to the cloud and datacenter arena.

In a glamorous black tie gala held in the Shangri-La’s Grand Ballroom, the celebration saw more than 150 C-level executives and award nominees attending. While all were there in recognition of the winners’ accomplishments, it was an opportunity to both network at the highest levels, and let one’s hair down while enjoying luxury food and drink.

First year in Hong Kong On the 30th November last year, it was W.Media’s great pleasure to host the third annual Asia Pacific Cloud & Datacenter Awards at the prestigious Kowloon Shangri-La Hotel in Hong Kong. The event brings together some of the industry’s finest companies, leaders and innovators, in recognition of the excellence and great achievements that they bring to the cloud and datacenter arena.

In a glamorous black tie gala held in the Shangri-La’s Grand Ballroom, the celebration saw more than 150 C-level executives and award nominees attending. While all were there in recognition of the winners’ accomplishments, it was an opportunity to both network at the highest levels, and let one’s hair down while enjoying luxury food and drink.

12

An opportunity to network Before the main festivities began, guests were able to relax and mingle at a champagne reception, which given the senior level of attendees and the broad facets of the industry from which they come, naturally offered the perfect opportunity to network.

For those wishing to commemorate the event and have a little fun, a professional photo booth was on-hand allowing guests to make the most of their fine tuxedos and beautiful ball gowns, all a light-painted neon backdrop. This neon glow theme permeated the event, and gave the whole thing a nice touch of Hong Kong glamor.

Meanwhile, members of a traditional lion dance were amongst the attendees and available for photographs, before leading the way to the Grand Ballroom accompanied by the sound of drums.

So it begins...

As the hubbub following the lion dance began to die down, the event began in earnest with an opening address from W.Media’s Head of Malaysia & Philippines Markets, Justin Heyes. This was closely followed by a speech from the event’s Diamond Sponsor, Huawei, for which Mr. Weijun Gu, Director of Huawei Philippines, took the reins.

As the applause died down, all that was left to do was top-up the wine and enjoy the entree.

Project award winners

People award winners

Following the main course, the awards for the project category were announced. The emcees were joined on stage by Benoit Boudreau, Head of APAC Data Center Design Engineering at AWS, who handed out the trophies to all the deserving winners.

As the final course came to a close, the last award announcements of the evening began, this time for the People Category. Here Vic Berry was joined by W.Media’s James Warne, Head of Media Solutions (APAC), and Karl Loomes, Editor in Chief, in presenting the final trophies of the night.

It then came time for the next guest speaker from Category Sponsor Envicool. Mr. Vic Barry, Vice President of Envicool International, both made the speech, and agreed to help hand out the awards for the People Category later in the evening.

Planet award winners Next came the announcements for the Planet Category, presented

by Mr. Michael Tang, Head of Computility Resource (IDC) at OPPO. The atmosphere became ever more jubilant as nominees turned into winners, and more and more tables had the pleasure of congratulating those bringing back a trophy.

Following the presentation, as dessert was served, guests once again began to mingle and take photographs, with scenes of celebratory handshaking and the swapping of business cards taking place in equal measure.

With a final speech, Justin Heyes brought the official ceremony to a close before being joined on stage by sponsors and winners for champagne popping and group photos.

All good things…

So as the last of the champagne was drunk, and the tables began to clear, guests began to disperse - many with trophies in hand. In some cases this meant heading for a nightcap to continue the celebration, in others it meant heading to bed for a well deserved rest.

We reflect now on what a successful evening it was, and look forward to doing it all again in 2024.

13

w.media

14

15

w.media

Data Center Outages: Expensive. Disruptive.

Preventable?

On October 14, 2023, a data center outage brought digital banking and financial services to a grinding halt in Singapore. Customers of at least two major banks were left in the lurch, as credit card transactions were declined, internet banking and POS terminals stopped working, ATMs froze, and one lost access to their own hard-earned money!

As per a submission made before the Parliament

by Minister of State for Trade and Industry, Alvin Tan, nearly 2.5 million payments and ATM transactions could not be completed due to the outage, and customers made as many as 810,000 failed attempts to access digital banking.

Subsequent investigation revealed that the outage at Equinix’s SG1 data center occurred when a third-party contractor incorrectly sent a signal to close the valves from the chilled water buffer tanks, which caused temperatures to rise.

The signal was sent during a planned system upgrade.

But this is neither the first, nor the most recent instance of a data center outage. For the purposes of this article, let us restrict ourselves to some of the major outages that took place in 2023 alone.

In February, a power surge at a utility data center caused cooling units at a Microsoft data center to go offline, leading to an outage. It affected customers hosted at the South East Asia cloud region, and affected digital services provided by Singapore’s Central Provident Fund Board.

It also impacted the websites of Esplanade and Nanyang Technological University (NTU).

And it’s not just Asia. In May, a data center outage in the United States, forced the Ascension via Christi health facility in Wichita, Kansas, to pause most surgeries and procedures for several hours.

In November, Cloudflare’s control plane and analytics services experienced disruption when, as per an official statement, one of their “core data center providers failed catastrophically.” This facility called PDXDC04 was one of their three data centers in Hillsboro, Oregon.

“A data outage has many dire consequences – from operational downtime to financial losses and reputational damage. One of the greatest concerns lies in compromised data security or privacy,” says Kumar Mitra, MD & Regional GM - CAP, Lenovo ISG. “Large-scale data centers, especially those supporting critical infrastructure and managing extensive data, often face more significant losses during outages.

Industries with strict uptime demands, such as finance and healthcare, may experience higher financial and operational repercussions from even brief downtimes compared to other sectors,” he says.

So, while outages are not uncommon, it is rather unfortunate that the world only takes notice when something goes wrong. What are we missing? What are we failing to see? Why can’t we seem to prevent these expensive and disruptive outages? To answer these questions, we have to first go to the root of what causes outages.

16

Why do outages occur and how can we prevent them?

According to Vyacheslav Chvoro, Head of Research Department at UnaFinancial, “The main cause of significant outages at DCs are power problems. Other causes include cooling failures, IT software or system errors and network issues.”

“Many data centers overlook the importance of both prevention and disaster recovery. It’s essential to adopt a mindset that acknowledges the possibility of outages affecting anyone,” says Mitra.

Sanjay Motwani (Vice President – APAC, Business Head – Legrand Data Center Solutions, India), says, “If there is a challenge, it will emerge from the rack.” He advocates for investment in better data center infrastructure instead of having a “we’ll manage somehow” attitude. “It requires as much attention as the network and compute sides. Because if the infrastructure fails, or even if a part of it fails, then But data centers are already investing in Uninterruptible Power Supply (UPS) systems. So, what more can be done?

Chvoro says, “It is important to constantly assess facility resilience with the help of monitoring solutions that deliver real-time information about the data center environment and the likelihood of problems. Constant monitoring of air conditioning, heating, and water might help reduce the risk of outages.” He also suggests, “It is necessary to keep updating software and applying patches on a regular basis. To ensure regular patching of updates, AI can be used to run scans for vulnerabilities and proactively identify issues related to data center equipment or application performance or security. Network-related outages can be prevented by using a combination of proactive network monitoring and minimizing the possibility of human errors using automation. It is also advisable to have network redundancy, which means that if one network fails, an alternative network with a different service provider is available.”

Motwani also bats for greater automation, saying, “Automation will have to come in to minimise human error, which is the second biggest reason behind outages.”

Mitra points to yet another benefit of AI, saying, “AI enhances threat detection, turning real-time data into actionable insights for effective cyber threat mitigation.”

Industry standards and guidelines It is important to note here that when it comes to guidelines, some markets have a detailed framework encompassing tools to prevent, detect and manage outages.

For example, Chvoro points to data center certification by the Uptime Institute. “The certification process is based on assessment of fault tolerance of the center and protection from potential failures. Upon the assessment, the data center is assigned a level of reliability, which is called a Tier.”

He further says, “In the Asia-Pacific region, countries are paying particular attention to regulations of cybersecurity to counter growing cyber threats targeting data centers, for example, the Cybersecurity Act in Singapore or the Privacy Act in Australia.” Chvoro adds, “Since Singapore has a reputation for being a major data center hub and holds 60% of the Southeast Asian data market, it has formulated various laws. Complying with them, data centers can improve the quality of service for end users and protect their data.”

Some key laws and guidelines in APAC: The Personal Data Protection Act of 2012 (PDPA) which regulates the collection, use and disclosure of personal data by private organizations.

Multi-Tier Cloud Security (MTCS) also known as Singapore Standard 584, which is the world’s first standard for Cloud security.

Technical Reference (TR) 62 for Cloud outage incident response (COIR), which is a set of recommendations that helps correct the situation quickly in case of operational failures of clouds.

Singapore tandard (SS) ISO/IEC 21878:2019, which addresses security of the growing virtualization of data center infrastructure.

But having regulations is one thing, and following them is quite another. So, will we see fewer outages in 2024? Have we learnt the lessons we needed to learn?

Watch this space for more…

17

w.media

The Batam Story: From Surf and Sand to Servers Batam, known for its golden beaches, azure waters, and even rolling green golf courses, is fast evolving into a data center destination of choice in South East Asia. Located just 20 kilometers away from Singapore, Batam is part of the Riau Islands province of Indonesia.

While Indonesia already has a thriving data center market in the greater Jakarta area, Batam is fast emerging as a new hotspot for the Cloud and data center industry.

Betting on Batam According to Mordor Intelligence, the size of the Indonesian data center market was US$ 2.06 Billion in 2023, and is projected to touch US$ 3.98 Billion in 2028, growing at a Compounded Average Growth Rate (CAGR) of 18.35 per cent. Batam is hungry for a large slice of this pie. When it comes to being a data center market, Batam may not be as mature as Jakarta, but it is taking sure and steady steps in that direction.

“Batam grabbed our attention due to its excellent connections directly to various places, its strategic location within the region, and the supportive environment from local authorities. Its exceptional subsea connectivity, boasting 12 live cables and 3 more in development, positions it as a key player. Furthermore, Batam’s recognition as a Special Economic Zone amplifies its appeal,” says Andreuw Th A F (CEO NeutraDC).

According to Jones Lang LaSalle (JLL), a global real estate major, that also publishes market research and reSo, how did this tourism hot spot become a digital hub? ports on investment opportunities, “With Batam’s strategic location, attractive tax incentives and good infrastructure, the island is well-positioned to become Indonesia’s next data centre hub.” The report goes on to explain, “The island has several power plants, including coal-fired Historically, Batam has been a hub of transportation and power plants, natural gas power plants, and renewable an important port in South East Asia, given its proximienergy power plants. Data centre operators in Batam can ty to Singapore and Malaysia. In fact, it is this strategic be confident that they will have a reliable source of power location, just across the Singapore Strait, and well within to meet their needs.” It further says, “Another lucrative the Indonesia-Singapore-Malaysia Growth Triangle, that advantage is the tax incentives offered by the Indonesian has played a key role in turning Batam into a data center government for data centre operators investing in Batam, market. including a tax holiday for the first five years of operation, a reduction in import duties on equipment and corporate While, Singapore was the original queen of the Asia Paincome tax, which will help data centre operators make cific (APAC) region’s data center market, its land area is their operations more cost-effective.” limited. It is already home to 60 data centers totalling 357 MW spread over just 734 square kilometers of land. After a point, Singapore began to struggle to meet the ever-inToday, Batam is home to data centers belonging to several creasing demand for land for building new data centers. international and regional players such as Princeton DigiMoreover, these data centers were placing a huge strain tal Group (PDG), GDS Holdings, Singtel, Gaw Capital and on the island nation’s power sources, guzzling as much as Sinar Primera.

7 percent of Singapore’s power.

Location, location, location!

“Batam stands out as a prime location for data center development, thanks to its strategic location, abundant technology talent, connectivity infrastructure, sustainable power resources, and land availability. Its geographical advantage positions it as a critical digital bridge, seamlessly connecting it to Singapore,” says Asher Ling (Chief Technology Officer and Managing Director of Singapore, PDG).

18

In 2019, Singapore’s Infocomm Media Development Authority (IMDA) announced a temporary pause in development of new data centers. The moratorium was lifted in 2022, and in July that year, the IMDA and Singapore’s Economic Development Board (EDB) officially launched a pilot scheme inviting new applications for setting up data centers.

Nongsa Digital Park Today Batam’s data centers are mainly located in the Nongsa Digital Park (NDP), on the North Eastern tip of Batam. NDP was inaugurated in March 2018, and is being developed by Citrmas Group. Even before COVID struck, NDP had six office buildings where over 1,000 professionals worked for over 100 international and regional technology companies. In 2020, NDP was officially granted Special Economic Zone (SEZ) status, thus making it more attractive as a data center destination. Another huge advantage of this location is the access to subsea and fiber optic cables that connect it to the rest of Asia and the world.

Evolution of the SG+ Strategy But while Singapore had pressed pause, the data center market couldn’t remain stagnant. Even when the world’s economy ground to a halt due to the COVID-19 pandemic, the data center industry grew by leaps and bounds, given a surge in the dependence on digital infrastructure.

Thus, data centers started looking outside Singapore, and growth started spilling out into two main areas – Malaysia’s Johor peninsula which is located just north of Singapore across the narrow Johor Strait, and the Riau Islands. Today the region is popularly known by its acronym SIJORI (Singapore-Johor-Riau) and has become one of APAC’s busiest data center markets.

The strategy to plant roots in locations other than Singapore, came to be known as Singapore+ or SG+ Strategy. In fact, Singapore’s own EDB describes SG+ as a “twinning for winning” strategy.

“Batam is part of the SG+ strategy that has been chosen by a few Data Centre players within the broader SIJORI Growth Triangle vision. Having a Special Economic Zone (SEZ) such as Nongsa Digital Park (NDP), with ad-hoc regulations to incentivise and protect Data Centre investments, makes the Indonesian island a prime target for Data Center location,” says Marco Bardelli (Senior Executive Director, NDP). “Indonesia, being the 4th largest country in Asia, will continue to be data-hungry and Batam constitutes a safe location from natural disasters.

Furthermore AI-driven energy-intensive demand, coupled with increased future faster connectivity with Singapore, might look favourably for Batam,” he adds.

PDG’s Asher Ling concurs. “Singapore has a strategic position as a major data center hub in the region. Our Singapore+ strategy with data centers in Singapore, Johor and Batam are well positioned to serve the rapid growth that the region is witnessing,” he says.

“The region’s proximity to Singapore not only facilitates spillover clientele from Singapore’s robust DC-based businesses but also anticipates a surge in regional demand, surpassing existing capacities.

“With more submarine domestic and international fibre optic connectivity being planned to land there, Batam will become a key strategic place for secure establishment of Data Centers,” says Bardelli. He points out that the “Indonesian Government is constructing an impressive Tier IV Data Centre Campus in NDP SEZ,” which showcases the government’s support for the park’s development.

In October 2023, the Indonesia Investment Authority (INA), which is the country’s sovereign wealth fund, announced that it had entered into a joint venture with Chinese data center operator GDS to develop a countrywide data center platform with its first project to be a hyperscale data center campus in NDP.

Challenges and Concerns

But there are still certain concerns, mainly pertaining to environmental impact of data centers. Data center operators are mindful of this and are calibrating solutions accordingly. According to Ling, “The requirement to build sustainable data centers is only going to increase as the demand for data driven by cloud and AI continues to grow. Renewable energy procurement is a key element for sustainable data center operations.” But he is hopeful, “As decarbonization efforts increase, local grids will have a greater ratio of renewable energy. The procurement of green power should become easier for corporates.”

He also says, “Another area of focus is energy efficiency – cutting edge design and new cooling technologies will be deployed resulting in higher operational efficiency leading to data centers operating at PUEs closer to 1. Rigorous sustainability and ESG financial reporting standards will also become the norm.”

Andreuw Th A F also points out, “Upgrading infrastructure, including better internet connectivity and larger capacities, are essentials. Additionally, addressing the skills gap by providing more knowledge and information regarding the data center itself and the benefits that can be obtained by acknowledging and taking it into part of the corporate needs would further foster the growth of the data center industry in Batam.”

However, these are all realistic and achievable goals, and all stakeholders appear sufficiently motivated to do what is necessary. Therefore, Batam is all set to shine bright as the crown jewel of SI-JO-RI and Southeast Asia.

This is bolstered by Batam’s resilience to natural disasters, and offering a secure edge location for disaster recovery,” says Andreuw Th A F.

19

w.media

How the data centre market needs to adapt to face the AI tsunami!

As 2024 gets underway, the industry once again starts to look at the expected trends for the following year. In the most part, there are very few surprises and general consensus in what the data centre market will be facing. The least surprising of all these predictions is of course, that demand will continue to grow exponentially as the ongoing artificial intelligence (AI) boom looks set reach new heights.

According to a report from the International Data Corporation (IDC) for example, spending on AI in the Asia-Pacific (APAC) region is set to increase to US$78.4 billion by 2027. Forbes, meanwhile, predicts 30% of APAC firms will benefit from the “transformative impact” of generative AI as larger, more established firms adopt the technology in coming years, following what it calls, “early trailblazers” of the technology.

This demand brings greater-than-ever pressure on the data centre industry. Not only that, but it comes at a time where sustainability efforts and carbon neutrality are the benchmarks that this energy-hungry business is now measured against. The only way to meet these expectations will be through new, innovative solutions – both in the building and construction phase, as well as in daily operations. Bridge Data Centres (BDC) is one company spearheading these efforts.

Bridge Data Centres Bridge Data Centres is a leading global provider of hyperscale data centre solutions, specializing in delivering ultra-large scale offerings across the Asia Pacific region.

With strategic backing from Bain Capital, BDC cites this as reinforcing “their commitment to excellence and innovation in the dynamic realm of data centres”.

An impressive testament to their technological prowess is found in their group company, Chindata, holding a robust portfolio of 493 patents. These patents, globally applicable under BDC’s build-to-suit solutions, highlight the company’s emphasis on cutting-edge solutions, establishing them at the forefront of the innovative technologies the ever-evolving data centre landscape requires.

Consider power supply, for example.

In this burgeoning era of artificial intelligence generated content (AIGC), ever more powerful CPUs and GPUs are required, inevitably bringing with them greater demand

20

for electricity and higher density racks. Here BDC takes advantage of Chindata’s X-PrePower 3.0 solution, which integrates the equipment of the power supply link, simplifying the power pathways.

This improves both efficiency and floor space requirements – data shows it saves 20% or more on floorspace compared to traditional power distribution modes and can reach an overall efficiency of 98.5%. In turn, of course, this reduces operational costs and helps data centres reach higher environmental standards. The lower footprint, meanwhile, amongst other benefits, has helped reduce onsite delivery time from one month to just two weeks.

Bridge is the benefactor of the wealth of knowledge Chindata offers, implementing all of the group’s patented AI solutions across its own APAC projects. These initiatives span the life cycle of data centre builds and operations, and by aligning itself so well with its parent company, Bridge Data Centres is well placed to meet the wave of demand coming from the AI revolution.

Similarly, the support of the Malaysian technological ecosystem helps bring in investment into the country, increasing economic growth and offering the local workforce new employment opportunities.

Breaking new ground in every sense of the word Bridge Data Centres’ MY06 project in Johor is the crown jewel when it comes to matching these innovative solutions with sustainability and social responsibility efforts. Here, new industry benchmarks are continuously being set, most notably in what it calls the “Three High Efficiency” - energy utilization, construction speed, and capital investment.

Phase 1 of the project was constructed, for example, using a new agile modulization method, whereby prefabricated modules that encompassed everything from power distribution to cooling technology, were built in China, then shipped in more than 400 containers to Malaysia, where the local team then assembled them.

This not only reduced capital expenditure and construction time, but similarly cut carbon emissions and lessened the environmental impact that large-scale civil construction would have brought with it. All told, the project was completed within 11 months, including a six month construction period in China, with onsite assembly taking just 30 days.

Similarly, the project’s drive to energy utilization and sustainability can be highlighted through its efficient cooling build.

On the wind side, the facility uses indirect evaporative cooling technology, while on the water side, cooling towers and coolant distribution units (CDUs) are used to help dissipate the high levels of heat being generated. This means that despite the tropical climate, the overall operational PUE was just 1.2 – a new industry standard.

Malaysia leads the way There is no better example of these innovative solutions than BDC’s efforts in Malaysia. Bridge is leading the way when it comes to the development of the DC industry in Malaysia, where amongst other things it was the first company to build and operate a hyperscale data centre in Johor.

The company strategically positions its data centers in locations specifically to take advantage of points of interconnect for dark fiber connectivity - notably Johor, Cyberjaya and Bukit Jalil. This allows its customers to establish dark fiber connectivity to Singapore, as well as various locations within Malaysia, offering secure, highspeed, low-latency connections between countries and states.

Of course improved digital connectivity between the two countries brings with it myriad benefits, improving the digital landscape and strengthening the supportive infrastructure to support the oncoming AI wave of demand.

MY06 Phase 4 meanwhile, as well as similarly using largescale, prefabricated module construction, was the company’s first high-density air cooling project delivered overseas. Here an innovative magnetic levitation two-phase cooling system called Xuanbing is used to achieve some of the highest heat dissipation and energy efficiency of air cooling systems.

Industry recognition These great efforts have, of course, not gone unnoticed. Recently, at W.Media’s prestigious Cloud & Datacenter Awards in Hong Kong, Bridge Data Centres won two well-deserved accolades in recognition of its many achievements: In the Planet category, BDC received the Bridging the Digital Divide award, while in the Project category, it walked away with the Data Centre Design & Build award.

The rapid development of AI is being heralded by many as ‘the next industrial revolution’. Just as with that era, the technology of our time needs to keep up, whether that be in the raw computing power of the latest GPUs, or in the construction and operation of data centres.

The DC industry is at the forefront of this revolution, with companies like Bridge Data Centres and Chindata setting the example in how new technologies and innovation will be needed at greater levels than ever before.

21

w.media

The Interconnected Bond Between 5G Technology and Data Centers in Malaysia In the heart of Southeast Asia, Malaysia stands at the forefront of technological evolution, with 5G technology paving the way for a connected future. The Malaysian landscape is witnessing a digital renaissance, marked by the continuous advancement of artificial intelligence, virtual reality, cloud computing, Internet of Things, and 5G technology.

In terms of 5G network speeds, Malaysia stands out as a leading player in the global 5G market, securing the third position worldwide for 5G download speed. According to Speedtest Intelligence® data for Q3 2023, Malaysia boasts an impressive download speed of 485.25 Mbps.

This places Malaysia ahead not only of its Southeast Asian counterparts but also surpasses certain developed markets such as the United Kingdom, Japan, and Germany.

The Connection Between 5G and Data Centers in Malaysia A robust 5G infrastructure enhances data center usage by providing faster and more reliable wireless connectivity. With Malaysia consistently advancing its 5G network, it actively fuels the rise in data center utilization nationwide, enabling seamless connectivity, accelerated data processing, and a diverse range of applications and services.

The rapid growth of 5G technology has unleashed a surge in data consumption, driven by faster internet speeds and the proliferation of high-data applications like augmented reality and IoT. To put it in perspective, in 2022, the average data used per smartphone per month worldwide amounted to 15 gigabytes (GB). Statista forecasts that this will increase almost four times reaching 46 GB per smartphone per month globally in 2028.

22

Meanwhile, during the first quarter of 2021 in Malaysia, the average monthly mobile data consumption was approximately 25.7 GB of data. Given the rising demand for online video and social media content, it is anticipated that this figure will continue to expand in the coming years.

This surge in data usage necessitates more servers for processing, making DCs the nerve centers for managing the colossal amounts of information generated by 5G-enabled devices.

The symbiotic relationship between 5G and DCs becomes apparent as 5G fuels the need for increased data processing capacity, and DCs provide the infrastructure for seamless functionality. Additionally, the demand for low-latency communication in 5G requires strategically placed data centers, leading to the rise of edge computing.

In essence, the 5G revolution is reshaping the digital landscape, driving the evolution and expansion of data center infrastructure. As 5G adoption continues, the interplay between 5G technology and data centers ensures a connected future characterized by speed, responsiveness, and optimal performance.

Singapore’s Influence on Malaysia’s Data Centers As Malaysia embarks on its journey into the 5G era, the growth of data centers becomes intrinsically linked to the expansion of 5G technology. The spillover effect from neighboring Singapore has been particularly noteworthy.

Singapore, until recently facing a moratorium on data center expansions, has inadvertently turned Malaysia into an attractive destination for data center operators seeking to capitalize on the burgeoning 5G infrastructure.

The influx of Singaporean data center operators into Malaysia aligns serendipitously with the surge in 5G technology, creating a symbiotic relationship that propels both industries forward.

This influx not only bolsters Malaysia’s position as a regional technology hub but also solidifies the interdependence between 5G technology and the growth of data centers in the country.

The moratorium in Singapore has proven to be a catalyst for Malaysia’s rise as a hotspot for data center operators. With Singaporean companies seeking expansion opportunities, Malaysia’s strategic location, coupled with its commitment to advancing 5G technology, has made it an ideal destination.

The Synchronization of 5G Advancements and Data Center Expansion The rapid evolution of 5G technology in Malaysia poses both opportunities and challenges for data centers. The specific requirements to support the evolving 5G landscape demand innovative solutions from data center operators.

The need for high-speed, low-latency connectivity requires data centers to invest in state-of-the-art infrastructure, energy-efficient systems, and advanced security measures.

As 5G technology continues to revolutionize communication with faster speeds, low latency for instant interactions, and the capacity to connect numerous devices simultaneously, data centers find themselves at the forefront of innovation, adapting to meet the unique demands of this dynamic landscape. The synchronization between 5G advancements and data center expansion showcases the intricate dance between these two pillars of the digital age.

As Malaysia embraces the transformative power of 5G, the role of data centers becomes increasingly pivotal. The symbiotic relationship between these two technological pillars not only fuels the current digital revolution, but also lays the foundation for a connected future.

As the world hurtles towards an era defined by connectivity, Malaysia stands poised at the forefront, fueled by the synergy between 5G technology and the ever-evolving capabilities of data centers. The future is not just connected; it’s collaborative, and Malaysia is leading the way.

23

w.media

Hong Kong: Where Tradition Meets Innovation in the Heart of the Data Center Revolution

Picture this: a city where ancient temples coexist with towering skyscrapers, where the scent of traditional dim sum mingles with the aroma of international cuisines, and where the energy of neon-lit streets rivals the buzz of a high-stakes business deal.

Business in the Heart of Asia

Welcome to Hong Kong – a place that effortlessly balances a vibrant lifestyle with a thriving business scene, and a city that’s making waves in the data center industry.

Hong Kong holds the fourth position in the Global Financial Centres Index (GFCI), utilizing data from various sources such as the United Nations ICT Development Index, the World Economic Forum’s Networked Readiness Index, and the World Bank’s assessments of government effectiveness.

A Gateway of Culture and Lifestyle Hong Kong’s story is like a rich tapestry woven with threads of Chinese traditions and British influences. As you stroll through its streets, you’ll encounter ancient temples and ultra-modern architecture standing side by side, a testament to the city’s harmonious blend of the old and the new.

When the sun sets, Hong Kong transforms into a nightlife wonderland. Rooftop bars with breathtaking views, bustling street markets, and the irresistible charm of neon lights – the city knows how to keep the party going. It’s a nightlife experience that leaves an indelible mark on anyone fortunate enough to witness it.

Moreover, for food enthusiasts, Hong Kong is a culinary paradise. From the delicate flavors of dim sum to the tantalizing offerings of street-side hawkers, the city’s diverse food scene is a feast for the senses. Whether you’re indulging in Michelin-starred cuisine or savoring local delights at a dai pai dong, Hong Kong promises a gastronomic adventure like no other.

24

Beyond its cultural and lifestyle offerings, Hong Kong is one of the global financial hubs, serving as a gateway for international businesses.

A financial hub, or referred to as a financial center by the International Monetary Fund (IMF), is a location where numerous and diverse financial services institutions have their headquarters. These cities attract professionals due to high living standards and growth opportunities.

Hong Kong’s status as a global financial hub stems from its colonial history and strategic position. It became a crucial trading port in the 19th century, with significant financial growth after World War II. Despite its handover to China, Hong Kong remains a key player, offering stable legal systems, a favorable tax environment, and a multicultural workforce, especially in the Central District, home to major financial activities and the Hong Kong Stock Exchange. With this, whether you’re a multinational corporation or a budding startup, Hong Kong provides an environment conducive to growth and innovation.

The Rise of Data Centers In the digital era, Hong Kong’s significance is not confined to finance and commerce alone. The city is rapidly emerging as a key player in the data center industry.

In Cushman & Wakefield’s 2023 Global Data Center Market Comparison report, the Hong Kong data center industry secured the second position in Asia and ranked fourth globally. The assessment considered various factors, including a robust ecosystem, exceptional connectivity, sustained demand, and extensive availability of cloud services.

Hong Kong, being one of Asia’s major financial centers with a dynamic business environment, exhibits a substantial need for computing power. Additionally, due to its geographical proximity and close integration with cities in mainland China, the Hong Kong data center industry is often referred to as a “gateway” for serving customers in the mainland Chinese market. Foreign entities in the industry can leverage Hong Kong’s more lenient regulations on foreign investment.

As the city focuses on advancing technology, digital sectors, and high-tech applications, particularly in artificial intelligence, the demand for computing capacity is expected to continually rise.

Celebrating Hong Kong’s Tapestry of Success In the glow of the W.Media’s Asia Pacific Cloud & Datacenter Awards, Hong Kong emerges as more than just a stunning backdrop; it’s the beating heart of a thriving industry. The decision to host such a pivotal event here underscores the city’s unique fusion of lifestyle allure and business brilliance.

As the winners take center stage and industry leaders gather, Hong Kong’s role becomes unmistakable. It’s not merely a host; it’s a partner in the journey toward a digitally transformed future.

The awards, while recognizing individual triumphs, also pay homage to the symbiotic relationship between Hong Kong and the ever-evolving landscape of the cloud and data center industry.

In essence, Hong Kong is a canvas where lifestyle excellence and business acumen effortlessly converge.

The awards ceremony becomes a celebration not just of individual achievements but of the collective triumph of an industry finding a nurturing home in Hong Kong. The city’s resilience, strategic importance, and dedication to innovation make it an integral part of the narrative of success in the data center industry.

As the event concludes, Hong Kong extends an invitation to businesses to continue weaving stories of innovation, transformation, and excellence within its vibrant and dynamic embrace. The city stands not just as a host but as a catalyst for continued industry growth, beckoning all to contribute to the unfolding tale of success in this digital age.

Overcoming Challenges, Embracing Opportunities Navigating the data center landscape in Hong Kong also presents significant challenges in expanding its DC market due to land scarcity, high prices, and strong demand.

The scarcity of land poses a significant challenge to the growth of Hong Kong’s data center market. The limited overall land area, mountainous terrain, and high demand contribute to restricted supply and some of the world’s highest industrial land prices. As the demand for data center capacity continues to rise, so does the competition and prices for available land.

However, despite these challenges, developers and investors remain undeterred, as evidenced by several major land sales for data center development in recent years. Alongside the geographical advantages, demand, and infrastructure benefits of locating data centers in Hong Kong, a 2023 Cushman & Wakefield report highlights the role of Hong Kong’s favorable business tax structure in mitigating the impact of high land prices.

Over the past decade, the government has implemented various measures to enhance land supply for data centers. These measures include waiving fees for converting parts of eligible industrial buildings, accepting lease modifications for transforming industrial lots into high-tier data centers, and selling greenfield sites. The InnoParks of the Hong Kong Science and Technology Parks Corporation has been a significant contributor, supplying approximately 48 percent of land for data center development as of 2022.

Additionally, the government is exploring the possibility of reclaiming land in the Northern Metropolis, a planning area in the New Territories, to further support the development of data centers, according to the Research Office of Hong Kong’s Legislative Council Secretariat.

While some may approach Hong Kong with caution, the city’s resilience shines through. Challenges are met with adaptability, and concerns are addressed through a commitment to technological advancement. Despite external factors influencing perceptions, Hong Kong’s data center industry not only survives but thrives, attracting investment and fostering innovation.

25

w.media

APAC Data Centers: Which way are the winds blowing?

In 2023, the Cloud and Data Center market in the Asia Pacific region went through an exciting phase, with both, established and emerging markets, growing from strength to strength. And it looks poised for yet another year of growth and evolution. Let’s have a closer look at developments in the year that has gone by, and what researchers and market watchers are predicting for 2024.

Real(ly Expensive) Estate In 2023, some markets, like Japan, started becoming prohibitively expensive for running data centers. According to Turner & Townsend’s report titled Data Center Cost Index 2023, Tokyo is the most expensive place to build data centres at US$13.7 per watt, followed by Zurich, Silicon Valley, New Jersey and Singapore.

The research analysed data centre benchmarking costs from over 200 projects in 46 global markets in over 20 countries, alongside insight from 246 industry experts. It further says, “The trend has been notable in south-east Asian markets.

Jakarta (US$10.5 per watt) has risen to the seventh most expensive market globally for data centre construction, while Kuala Lumpur (US$10 per watt) has climbed to the 13th position in the rankings. The rapid digitalisation and economic growth in parts of Asia is creating new sources of opportunity in under-served markets.”

*Source: Data Center Cost Index 2023 report by Turner & Townsend But Knight Frank is upbeat about data centers in APAC. “Amidst times of crisis, opportunities persist, enabling investors to access favorable assets that offer capital appreciation and positive rental reversions. Thematic sectors such as living spaces, life sciences, and data centers present promising prospects,” it says in its blog titled Asia-Pacific real estate market remains resilient in 2024 despite macro headwinds.

26

27

w.media

Keeping up with AI Meanwhile, data center facilities will face newer challenges due to the proliferation of emerging technologies. Real estate research major Jones Lang Laselle says, “The evolution of artificial intelligence (AI) from excitement and hype in 2023 into rational and strategic adoption in 2024 – within the real estate sector and beyond – will drive both an acceleration in requirements for the number of data centers, as well as changes in location, construction, and operating criteria for individual centers.”

But the AI minefield will not be easy to navigate. Uptime Institute’s Five Data Center Predictions for 2024 report says, “The additional capacity needs of AI training clusters will contribute to a wider demand-supply imbalance by tying up even more of the equipment supply in the hands of a relatively few large and hyperscale data center operators.”

Market Size and Growth According to ResearchAndMarkets.com’s Asia Pacific Data Center Market Report 2023, “Asia-Pacific Data Centre Market will reach US$ 53.58 Billion in 2028 and expand at a CAGR of 12 % from 2023 to 2028.”

*Source: Asia Pacific Data Center Market Report 2023 by ResearchAndMarkets.com It found that “emerging markets like Osaka, Melbourne, Jakarta, Manila, Hanoi, Taipei, Hyderabad, New Delhi, and Chennai grew from just under 700 MW 5-years ago to currently over 3,000 MW, registering a whopping 300 percent growth in capacity.”

Mordor Intelligence also has similar projections. It estimated the data center market volume to be 11.90 thousand MW in APAC in 2023, and expected it “to reach 23.20 thousand MW by 2029, growing at a CAGR of 11.77% during the forecast period (2023-2029).” It also found, “The tier 3 type has a majority of share in the APAC region due to its major advantage. These tiers have high redundancy with multiple paths for power and cooling.” It further said, “The capacity during the forecast period (2023-2029) is expected to grow from 8522.04 MW in 2023 to 13981.5 MW in 2029, registering a CAGR of 8.60%.” However, it said, “The tier 4 type is expected to have a majority in growth rate of CAGR of 20.40%.”

Therefore, overall, it appears that 2024 could be a good year for APAC’s Cloud and Data Center industry, if it can find a way to appease the real estate and AI gods.

28

29