NEW YORK, April 30, 2024 /PRNewswire/ — The data center market size in Southeast Asia is estimated to grow by USD 3.69 billion from 2024 to 2028, according to Technavio. This growth is expected to occur at a Compound Annual Growth Rate (CAGR) of about 6.6% during the forecast period.
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Technavio has announced its latest market research report titled Data Center Market in Southeast Asia 2024-2028
Key Trends Fueling Growth
Shift toward large data center facilities:
In Southeast Asia, there’s a clear trend towards big, multi-story data centers. Land is scarce and pricey. So, it’s smarter for service providers to build up rather than out. They’re eyeing facilities with more space, like 150 MW ones, to cater to more clients efficiently.
These mega-centers are easier to maintain compared to lots of small ones. Plus, they can offer better prices, staying competitive in the market. With more storage and computers, these centers are a win-win for everyone. This shift is set to boost market growth in the region.
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Major Challenges:
High CAPEX associated with the construction of data centers and the rising OPEX
Constructing data centers in Southeast Asia, especially in Singapore and Indonesia, is costly due to high land and labor expenses. Land acquisition in Singapore, according to the Singapore Land Authority (SLA), can cost from under a thousand to several thousand dollars depending on the location, adding to the capital expenditure (CAPEX).
Operational expenditure (OPEX) is also rising, fueled by increased cloud workload migration. Power and cooling costs make up about 70% of operational expenses.
The dependence of organizations on data centers for digital transformation raises the stakes, necessitating efficient backup and disaster recovery mechanisms, as well as network infrastructure between sites, further increasing OPEX. These factors impede the growth of the data center market in Southeast Asia.
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Analyst Review
In Southeast Asia, the data center market is booming thanks to factors like the rapid increase in data, digitization, and IoT. This growth is supported by machine learning, which helps manage the huge amounts of data generated. With more internet users, internet traffic is surging, driving demand for data network services. B2B enterprises are investing heavily in hardware to keep up.
The GDP reflects this level of digitization, showing an upward trend. Investors are eyeing this market, providing growth capital for expansion. Some opt for buyouts. Real estate and infrastructure investors are capitalizing on the need for data center facilities. Cloud vendors like Amazon Web Services and Google Cloud are expanding their presence.
Private equity buyers see potential in this growing sector. Banks are financing these ventures. The landscape is competitive, but opportunities abound for those willing to invest.
Market Overview
In Southeast Asia, the data center market is booming due to the exponential increase in data and the rise of internet users. With more businesses going digital and embracing IoT, machine learning, and data network services, the demand for reliable data centers is soaring. B2B enterprises are investing heavily to handle the surge in internet traffic and digitization levels.
Investors are keen on this market, providing growth capital for expansion and buyouts. Real estate and infrastructure investors see opportunities in supporting the infrastructure needs of data centers. Cloud vendors like Amazon Web Services and Google Cloud are expanding their presence, alongside banks and telcos.
Co-location companies are also in demand as businesses seek to outsource their data center needs. Private equity buyers are eyeing acquisitions in this sector due to its promising growth potential. Overall, the Southeast Asia data center market is attracting diverse players, from tech giants to real-estate companies, all recognizing the lucrative opportunities in this rapidly evolving landscape.
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Key Topics Covered:
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation
7 Customer Landscape
End-user
BFSI
Energy
IT
Others
Component
IT Infrastructure
Electrical Construction
Mechanical Construction
General Construction
Security Solutions
Geography
Southeast Asia
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Vendor Landscape
11 Vendor Analysis
12 Appendix
About Technavio
Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.
With over 500 specialized analysts, Technavio’s report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio’s comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.
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SOURCE Technavio