Southeast Asian data centre market to be worth $12.3 billion by 2027

Singapore provided more than 55 percent of the total capacity added in Southeast Asia in 2021

The Southeast Asian data centre market is one of the fastest-growing markets in the world. In 2021, the region’s data center market was worth USD8.7 billion. By 2027, that number is projected to be worth USD12.3 billion.

Currently, colocation and hyperscale operators are increasing their investments in the region, according to a survey conducted by Arizton.

The Southeast Asia data center industry has a cumulative power capacity increase potential of about 2,400MW within the next five years. Singapore provided more than 55 percent of the total capacity added in Southeast Asia in 2021.

Big Data Exchange (BDx), Equinix, Facebook, Iron Mountain, Microsoft, and ST Telemedia Global Data Centres have all invested in Singapore, making it one of the most renowned data center markets. BDx and Equinix have been adopting renewable energy in their data centers.

More: Singapore starts focusing on data centres that meet environmental sustainability standards

Several organisations have also entered Southeast Asia with new announced and planned projects slated for the coming years. Data Center First, EdgeConneX, ESR Cayman, GDS Services, and Vantage Data Centers are among the organizations involved.

An analysis provided by Technavio suggests that one of the key drivers in the Southeast Asian data centre market is the increase in the application of IoT. 

Another key factor is the proximity to connectivity gateways and presence of strong submarine cable networks. These stations are strategically placed in locations with little marine traffic, minimising the danger of cable damage from objects such as ship anchors. Many colocation and cloud service providers are deliberately placing their data centers near Internet landing stations to cut connectivity costs and latency.

The scarcity of land in Singapore could be a huge concern for the region. Other factors, like zoning restrictions, exacerbate the shortage.

Because of its network infrastructure and the existence of Internet landing stations, as well as good government laws and a friendly economic environment, the country has been a favoured location for data centre operators.

The Southeast Asia data center market is growing at a CAGR of 6 percent from 2022 to 2027.

The Property Report editors wrote this article. For more information, email: [email protected].