Countries such as Thailand, Malaysia, and Indonesia are witnessing an increase in the construction from global collocation providers and REITs targeting wholesale collocation of hyper scale spaces in the market.  The data center market in Southeast Asia is witnessing growth with the increased interest from cloud providers such as Google, AWS, and Alibaba to open cloud regions.

The adoption of cloud-based services will be a key driver for the market in the next few years. Increasing internet penetration is likely to aid the use of smart devices in this region.

The impact of big data, IoT, artificial intelligence, and virtual reality will have a major impact on market growth in other southeast countries after 2020.

In Southeast Asia, Singapore is the main revenue generator in the APAC region. In 2019, Google announced to expand one of its data center based in Singapore. The country will be the first country to implement 5G technology, which will be followed by other countries by the end of the forecast period. Also, incentives from government agencies will be highly beneficial for continuous investment from both local and global data center developers.

The Southeast Asia market has a high potential for converged and hyperconverged infrastructure as they offer scalability and flexibility to operations. The adoption of storage systems has started shifting to all-flash storage array solutions.

The penetration of cloud computing, big data, and IoT technology is expected to be predominant drivers for the development of the Southeast Asia market. The server market is moving toward blade servers for developing a high-density computing environment. The adoption of organization-specific software over the cloud platform will also increase the demand for high computing servers. The market for ODM servers will also increase as service providers prefer to use servers based on specific usage. The adoption of x86 based servers is more common in the market. Dell EMC, HPE, IBM, Lenovo, Fijustu are some of the major server vendors. The market for storage drives has been growing rapidly from the last five years. The demand for high-performance I/O intensive storage solutions is increasing due to the growing number of applications such as cloud storage services from businesses across the region. The implementation of the 5G network will boost the digital economy in the region, which is likely to increase the demand for high- bandwidth networking infrastructure.

Singapore has several large-scale data centers, and the country is likely to witness the same during the forecast period. In 2019, Facebook and Google announced the development of hyperscale data centers, which are likely to be operational by 2020 or 2021. The labor cost in Singapore is high due to the availability of skilled workforces. In terms of security, data centers are installed with physical security and monitoring systems, including DCIM, BMS, and EMS systems. Most data centers developed in Malaysia during the forecast period will be greenfield development projects. Modular data center projects are likely to witness high growth during the forecast period. The labor cost in Malaysia is cheaper than in Singapore. However, the availability of skilled workforces will be a major challenge. CSF Group is among the prominent data center construction contractors in the region, whose expertise will play a vital role in the growth of the market in Malaysia during the forecast period.

The number of Tier I and Tier II data centers in Southeast Asia has reduced significantly over the last five years because of the increased awareness about the use of redundant infrastructure. UPS and PDU systems of Tier II data centers are equipped with minimum N+N redundancy. All other infrastructure facilities are identified to be working through the single delivery path with no redundancy in most cases. A majority of under-developed projects across the Southeast Asia region fall under the Tier III category. This trend is likely to continue during the forecast period, with several operators expecting to move to the Tier IV category based on the growth in rack power density and critical data center applications.

Most new data centers are designed to be of Tier III standards with a minimum of N+1 redundancy. They can be reconfigured with up to 2N+1 redundancy, with the incorporation of flexible data center designs. Tier IV facilities generate more revenue for the market, with focused investment on highly efficient cooling systems. They involve the adoption of a 2N+1 cooling unit.

Hyperscale data centers are considered to be of Tier IV standards in the market, which is a significant boost to the data center market. As of December 2019, there were around nine Tier IV certified data center facilities by Uptime Institute certified in Southeast Asia.