Data centres in the South East Asia region will experience substantial growth over the next two years.
According to the fifth edition of research for the Data Centre-South East Asia report by consulting firm BroadGroup, this sustainable growth will create a market conservatively estimated at US$3.4 billion by the end of 2017. However, this change is also set to alter the competitive landscape in the region.
BroadGroup said that half of the total of data centre market in the South East Asia (SEA) region currently exists in Brunei, Indonesia, Malaysia, Thailand, and Vietnam. By the end of 2016, the market in these countries is expected to collectively exceed 1 million square metre.
However, BroadGroup said that each market shows different complexity on their evolution.
Singapore continues to be the centre of cloud and data centre activities with a market size exceeding that of UK, which is Europe's largest, and still adding more capacity before the end of 2015.
Meanwhile, new data centre locations in Indonesia will be driven by its aggressive growth plans for space and power, as well as the readiness and success of Iskandar across the border from Singapore.
Bangkok is also expected to experience growth to its current low base. Apart from that, data centres in the city and nearby areas have the potential to expand into the economies of the Greater Mekong region.
"We see the emergence of a changing pattern in the deployment of IT assets in South East Asia, and areas such as Iskandar in Malaysia competing with the Pearl River Delta or Greater China economies, rather than other cities or digital parks in the region. [There is] also a possible shift away from the traditional tier 1 city axis used by enterprise investors so far," according to BroadGroup's press release.
Meanwhile, at least eight new development zones in SEA are typically supported by initiatives from the government, BroadGroup added. On top of that, according to 131 operators and 236 facilities covered in the report, at least US$1.2 billion of new investment is planned for the next two years, excluding future enterprise investments.
However, BroadGroup warns that dependencies like fulfillment of current investment plans, and new initiatives to resolve power challenges remain critical to the success of forecast growth in SEA region. They also suggested that opening private investment in dark fiber installation would push development.
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