What industry factors and policy discussions do you anticipate will influence APAC’s data centre infrastructure, resilience and capacity demands in the coming years?

What industry factors and policy discussions do you anticipate will influence APAC’s data centre infrastructure, resilience and capacity demands in the coming years?

Spokespeople from the founding members from the Asia Pacific Data Centre Association share insights on the key influences shaping the region’s data centre market.

Across the globe, the way data is housed across industries is changing. Digital Transformation initiatives such as Artificial Intelligence, Machine Learning and Edge developments are accelerating usage and fuelling the next generation of data centres.

In the midst of this transformative phase, ABI Research revealed Asia Pacific (APAC) is soon expected to host the largest number of colocation sites in 2030, accounting for 28% of total colocation sites worldwide – a 6% increase from 2023, where Europe topped the proportions at 31%.

The region’s growth is attributed to factors such as robust government support, industrial zone expansion, development of submarine cable networks, entry of global colocation companies due to customer demand, as well as investments from cloud service providers.

It’s unsurprising that the Asia Pacific Data Centre Association (APDCA) was launched earlier this year to reflect this progression. Aiming to identify and formulate common positions between data centre operators, supplies and stakeholders, eight key players in the industry are collaboratively empowering the industry to advocate for polices and regulations that support the sustainable growth of the market.

Like individual threads weaving into a tapestry, the eight operators – AirTunk; Digital Realty; Equinix; Global Switch; NTT Global Data Centers; Princeton Digital Group; ST Telemedia Global Data Centres; and Vantage Data Centers – are converging to create a stronger fabric for change.

The demand for robust data infrastructure has never been more critical. To get further insight into the APDCA’s vision for the future, we hear from Jeremy Deutsch, President, Equinix Asia-Pacific; Jonathan King, Group Chief Strategy and Investment Officer, ST Telemedia Global Data Centres, from the board; and Daniel Ong, Director, Solution Architect, Asia Pacific, Digital Realty.

Jeremy Deutsch, President, Equinix Asia-Pacific

Jeremy Deutsch, President, Equinix Asia-Pacific

The APAC region is witnessing a synchronous acceleration in digital infrastructure development, governments are introducing various policies to advance their digital capability and competitiveness. For example, the Hong Kong Government announced the Hong Kong Innovation and Technology to develop Hong Kong into an international I&T centre. The Malaysian Government also aims to develop its digital economy through the MyDigital initiative. Digital infrastructure is quickly becoming a cornerstone for governments and businesses to achieve a competitive advantage and succeed in an increasingly important digital economy. 

In today’s digital economy, volume of data is growing at a staggering rate as data-gathering devices continue to proliferate. To fully leverage the potential of AI, enterprises need to strategically acquire data from reliable sources and utilise appropriate models. The growing enterprise adoption of cloud computing and the focus on Edge Computing and AI to process and analyse data closer to the source will also require increasingly flexible and hybrid approaches to digital infrastructure.

Another trend is the rise of Everything-as-a-Service (XaaS), where on-demand digital services allow businesses to plug and play new digital capabilities at software speed that can be scaled up or down according to their needs. By 2026, IDC predicts that 65% of customers will opt to pay for their IT equipment and services through XaaS models, highlighting the growing popularity of this consumption model. Equinix has long been an advocate and champion for XaaS through Platform Equinix where users can interconnect and adopt digital capabilities and emerging technologies to build a competitive edge.

Growth of digital footprint should not come at a cost to sustainability, illustrated by the numerous technological and social achievements that reflect our steadfast commitment to climate neutrality by 2030. In South East Asia, we are making a significant contribution by offering sustainably powered and increasingly climate-neutral data centres, aligning with the governments’ environmental aspirations, for instance, the Singapore Green Plan 2030.

Equinix recognises its role as a digital infrastructure provider in supporting the region’s digital journey. We are dedicated to enhancing interconnectivity, supporting cloud services and enabling the digital transformation of businesses across the APAC region.

Jonathan King, Group Chief Strategy and Investment Officer, ST Telemedia Global Data Centres

Jonathan King, Group Chief Strategy and Investment Officer, ST Telemedia Global Data Centres

The APAC region is experiencing phenomenal demand for data centre colocation compared to the rest of the world. Between 2023 and 2028, APAC will see the strongest growth at 12.5% CAGR, compared to the Americas with 6.2%. In addition, it is projected that by 2026, APAC will account for half of the global colocation market. In the coming years we expect to see increased interplay between industry and policymaking in the APAC data centre landscape in the following areas:

The sustainability imperative

The escalation in demand for compute capacity and higher rack densities means that sustainability and energy efficiency considerations are weighing heavier than ever on data centre operators. We must continue innovating in measures such as liquid cooling, AI-enabled power management, renewables and sustainable facility design to stay ahead of the curve.

Balancing growth demands versus sovereignty

Expect countries to push for greater control over data storage within their borders. While entities operating across multiple geographies and different regulations might face a fragmented market with higher compliance costs, this also opens opportunities to establish local data centres and colocation facilities to help meet local regulations.

Bridging the skills gap

The data centre industry needs more skilled engineers and technicians. Policymakers must work with industry to assist in the development of a robust talent pipeline, including policies that attract and retain both local and international expertise. Public-private partnerships must also play a deeper role in cultivating a skilled workforce.

The APAC data centre industry is at a crossroads; success hinges on the ability to navigate policy while driving sustainable innovation. Enterprises that prioritise collaboration and invest in future-proof digital infrastructure and talent will be well-placed to thrive.

Daniel Ong, Director, Solution Architect, Asia Pacific, Digital Realty

Daniel Ong, Director, Solution Architect, Asia Pacific, Digital Realty

The burgeoning enterprise AI market will be one of the biggest drivers of growth and presents a transformative opportunity for the data centre industry in APAC.

However, we believe AI adoption will not be a linear migration. Rather, AI infrastructure will mirror the dynamic evolution of the cloud, evolving from single provider models to the multi-cloud and hybrid cloud architectures dominant today. Increasingly, customers will look to combine private AI infrastructure with access to large public AI models. This allows them to access both public and private data securely for training and customisation, while maintaining control over data for enhanced privacy and security based on specific needs.

Data centres will need to evolve to meet customer demand for robust and adaptable data centre infrastructure that can help them unlock new levels of efficiency and innovation with AI. We see this in three key areas:

  • Open, hybrid architecture: Multi-tenant data centres with enhanced connectivity between facilities offer organisations the flexibility to integrate increasingly complex digital infrastructure deployments. With open and secure platforms, customers have access to a global ecosystem of service providers, allowing them to build and orchestrate their ideal solutions easily and efficiently without the constraints of physical location or closed ecosystems.
  • Modular infrastructure: Pre-fabricated, scalable solutions eliminate the need for costly, time-consuming overhauls. They enable data centres to seamlessly adapt to escalating AI demands while maintaining peak performance and reducing capital expenditure.
  • Sustainability: AI’s high power and cooling demands require a shift in digital architecture. Modular data centres allow adaptive cooling based on real-time IT equipment heat loads. This efficient power distribution reduces energy waste, offering a sustainable solution to supporting AI advancements.

Digital Realty foresaw AI’s trajectory early, designing our facilities for flexibility and scalability to empower customers to harness the full potential of AI. Our modular design approach enabled us to accelerate a massive AI deployment for next-gen cloud service provider CoreWeave, reducing deployment time in half. KakaoBank in Korea chose our Seoul facility for its AI lab to accelerate AI-powered innovation in financial services.

By embracing hybrid infrastructure models, high-performance connectivity and sustainable solutions, the data centre industry can be the cornerstone for the region’s future AI ecosystem.

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