Data center services market in SEA to reach US$ 6.4B by 2025

The market size of the ASEAN Data Center Services market is estimated to be USD 2,203.06 Million in 2018 and is expected to record CAGR growth rate of 16.3% and is expected to reach a market size of USD 6,339.93 Million in 2025.

Definition / Scope
Market Overview
Top Market Opportunities
Market Drivers
Market Restraints
Industry Challenges
Technology Trends
Other Key Market Trends
Market Size and Forecast
Market Outlook
Technology Roadmap
Distribution Chain Analysis
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References
Appendix

Definition / Scope

Data Center Services is a collective term for the supporting components necessary for the proper operation of a repository for storage, management and dissemination of data organized around a body of knowledge or pertaining to an enterprise. As such, data center services can involve hardware, software, processes and personnel.

Outsourcing of data centers to a third party service provider is available in two models which includes

Managed Hosting

Managed Hosting includes Servers, Customers are not needed to buy servers but are needed to rent the servers from the data center operators with customised specifications. Managed Hosting services offer the benefits of cloud computing in a dedicated environment i.e. private cloud. Managed Hosting services also includes third-party hosted private cloud.

The Data Center operator in most cases also provide 24/7 System support services such as monitoring and rebooting, which includes operating system management and software security management.

Colocation

A colocation (colo) is a data center facility in which a business can rent space for serversand other computing hardware. Typically, a colo provides the building, cooling, power, bandwidth and physical security while the customer provides servers and storage.

Space in the facility is often leased by the rack, cabinet, cage or room. Many colos have extended their offerings to include managed services that support their customers’ business initiatives.

Market Overview

The ASEAN data center services market is estimated to be worth USD 2,203.06 Million in revenue in 2018, representing a growth of 16.3% over 2017. The market will grow at a Compounded Annual Growth rate of 16.3% from 2018 to 2025 to reach USD 6,339.93 Million at the end of 2025.
In more mature data center service markets (e.g., Singapore), wholesale colocation services will lead growth, driven by demand from hyperscale cloud vendors.
Among the countries experiencing high data center services revenues growth (e.g., Indonesia, Thailand), the Banking & Financial Services sector continues to be a growth catalyst for the industry.
The key theme driving growth across ASEAN is the explosive digital needs of emerging economies with huge populations such as Indonesia. Furthermore rising complexities within the IT infrastructure brought about by virtualization and consolidation, coupled with various cost constraints, are encouraging enterprises to look into adopting third-party data center services. This is spurring the strong growth of managed hosting, especially across emerging economies.
While there is a greater adoption of managed hosting services, colocation services continue to dominate data center services revenue. colocation services account for the bulk of market revenue at 62.8% in 2018. This will continue to be driven by large enterprises and highly regulated verticals, such as Banking, Financial Services, and Insurance (BFSI), which require strict data confidentiality and complete management control of their operations. In addition, cloud service providers are also generating new demand for colocation as they opt for third-party facilities to host their infrastructure for providing services to customers.
The market size of the Managed Hosting Service is estimated to be USD 819.54 Million in 2018 and is expected to reach a market size of USD 2358.45 Million in 2025
The estimated market size of Colocation services is estimated to be USD 1383.52 Million in 2018 and is expected to reach a market size of USD 3981.48 Million in 2025.
It is noteworthy that some enterprises have chosen to bypass management of their IT operations and migrate straight to cloud services such as Infrastructure-as-a-Service (IaaS). The growth of cloud services thus poses a cannibalization effect to the outsourced hosting market. In response to this, many service providers have expanded data center service offerings to include cloud-based offerings as well.

Market Risks

Bargaining power of Suppliers

Data Center Services have higher bargaining power of suppliers due to reasons such as brand loyalty of customers and vendor lock-in, the most bargaining power suppliers have is with data centers and power services. Data centers are packed with servers and other processors; as a result, it requires a lot of cooling equipment to prevent overheating. Like many data centers, cloud data centers consume a lot of power.

With the power consumption doubling, it puts a lot of stress on power grids. Below is a graph of monthly costs associated with data centers. The bargaining of suppliers can be rated as a moderate competitive force because there is a limited electrical power resource.

Threat of New Entrants

The Data Center Services industry is growing promptly and this introduces new Entrants into the market. With the growing market, it causes the level of competition to increase, but it also depends on what type of company it is within the Data Center Services market. The market does not have much entry barriers; instead it reduces the barriers of entry to new start-up companies because of its low expense and expertise which are needed in traditional IT.

Data Center Services market may have low entry barriers, but it also means higher competition, potentially decreased profitability and prices, and decreased creativity for a unique business. Low entry barriers do not mean there are none.

Possible entry barriers may include: Government Policy, Brand Identity, and Switching Costs. As technology continues to rapidly grow, it becomes easier for smaller, starting companies to be introduced into the market.

These companies may have started their companies with lesser expense and expertise, but to maintain their company’s competitive advantage would be difficult with the lack of creativity and uniqueness. It is difficult for customers to switch to another cloud computing company when new training is needed to use the product. The threat of new entrants can be rated as low to moderate competitive force.

Threat of Substitute Products or Services

The main competitor against Data Center Services is traditional IT and Open-Source Computing. With new entrants introduced into the market, new “as-a-Service” products and services are being researched and developed.

This helps widen the scope of different products and as a result, this creates many diverse products that can be used as substitutes to current standard Data Center Services. Furthermore, these “as-a-Service” offerings could be lower prices, but with better overall performance.

Customers who are subscribed Data Center Services to are basically “locked” into exclusive products or services, which in turn will progressively become a cutthroat margin. Meanwhile, open-source Data Center Services companies are far less expensive than other Data Center Services companies. The rating for threats of substitute products or services is rated a high competitive force because there are many potential new products.

The Bargaining Power of Buyers

With rapidly increasing new companies joining the Data Center Services market, we can clearly grasp the idea of power being shifted from suppliers to buyers. With customers moving switching from traditional IT to Data Center Services, they are able to bargain and decrease prices.

By now, most of us understand the true “boss” of a company is its customers. A buyer’s bargaining power includes its customers’ size and their concentration in certain geographical areas. Majority of bargaining power of buyers are in Managed Hosting because the market has a low switching cost and there is a variety of many products and choices to choose from.

Majority of buyers are seeking for a Data Center Services company that can offer price competitiveness. When a buyer or a group of buyers is existent in the market, they can greatly influence a company’s selling decisions and determine its price competitiveness.

Buyers can bargain and demand for a decrease in prices, or a demand in higher quality of products or services. The price competitiveness is one of many aspects that are utilized to determine the attractiveness of the industry by lowering its profitability. It can be rated bargaining power of buyers as a high competitive force because buyers can bargain and costs to switch are relatively low.

Top Market Opportunities

Exponential Growth in Data Center Traffic

From server closets to large hyperscale deployments, data centers are at the crux of delivering IT services and providing storage, communications, and networking to the growing number of networked devices, users, and business processes in general. The growing importance of data analytics—the result of big data coming from ubiquitously networked end-user devices and IoT alike—has added to the value and growth of data centers.

They touch nearly every aspect of an enterprise, whether internal/employee-related data, communication or processes, or partner-and customer-facing information and services. The efficient and effective use of data center technology such as virtualization, new software-based architectures, and management tools and use of public vs. private resources and so on can all add to the agility, success, and competitive differentiation of a business.

The increased focus on business agility and cost optimization has led to the rise and growth of cloud data centers. Cloud adoption enables faster delivery of services and data, increased application performance, and improved operational efficiencies.

It is estimated that Annual global data center IP traffic will reach 20.6 Zettabytes (ZB) (1.7 ZB per month) by the end of 2021, up from 6.8 ZB per year (568 exabytes [EB] per month) in 2016.
Global data center IP traffic will grow 3-fold over the next 5 years. Overall, data center IP traffic will grow at a Compound Annual Growth Rate (CAGR) of 25 percent from 2016 to 2021.

Increase in IoT trends

The Internet of Things (IoT) has a potential transformational effect on the data center market, its customers, technology providers, technologies, and sales and marketing models, according to Gartner, Inc. Gartner estimates that the IoT will include 26 billion units installed by 2020, and by that time, IoT product and service suppliers will generate incremental revenue exceeding $300 billion, mostly in services.

IoT deployments will generate large quantities of data that need to be processed and analyzed in real time. Processing large quantities of IoT data in real time will increase as a proportion of workloads of data centers. The magnitude of network connections and data associated with the IoT will accelerate a distributed data center management approach that calls for providers to offer efficient system management platforms.

Data center operations and providers will need to deploy more forward-looking capacity management platforms that can include a data center infrastructure management (DCIM) system approach of aligning IT and operational technology (OT) standards and communications protocols to be able to proactively provide the production facility to process the IoT data points based on the priorities and the business needs.

Already in the data center planning phase, throughput models derived from statistical capacity management platforms or infrastructure capacity toolkits will include business applications and associated data streams.

Market Opportunities in BFSI

BFSI is a sector characterized by digitization, and the increasing number of customers that are using various banking applications has resulted in exponential growth of data in the banking and financial services industry.

Data centers are increasingly becoming an important part for banking and financial industry, as the industry requires effective management of crucial data. Additionally, BFSI handles thousands of virtual machines and physical servers.

Moreover, they have several monitoring tools that need to deal with various challenges such as optimizing resource allocation, reducing processing times and maintaining data center uptimes on a daily basis. In the sector, numerous transactions are being processed every minute, and any disruption can cost billion dollar losses.

The BFSI industry is continuously in need of efficient data center services that can assist in daily operations. Data center service providers help the organizations in increasing speed, improving flexibility, and alleviating risks, resulting in increasing demand for these services in the BFSI industry.

Market Opportunities in IT and Telecom

Advancements in communication technology have paved the way for high-reliability, long-life, and application-ready computing solutions to handle and store data traffic originating from signals and other data streams.

Growing communication technology has had a positive impact on the IT and telecom industry. The IT and telecom industry is therefore in need of data centers to store the ever-increasing data.

The IT and telecom industry is characterized by ever-increasing demand, which is accompanied by a sudden expansion in the data center infrastructure and related resources. This growing demand for effective services is expected to cause a surge in the overall services market for data centers.

Market Drivers

Growth of Hyper scale Cloud Vendors

Hyperscale cloud service providers have been key in driving the demand for data center services in the ASEAN. For instance, some cloud vendors have begun promoting Malaysia as a country with rapid cloud adoption. Earlier in May 2017, Alibaba Cloud unveiled plans to open the first data center in Kuala Lumpur, growing the company’s footprint to 15 data centers worldwide.

Storing data in the cloud is proving to be an effective medium for enterprises worldwide. Commercial data requires a large storage space, which varies in SMEs and large enterprises. With the increasing amount of data generated through IoT, storing data on-premise is proving to be expensive.

Therefore, many enterprises have started moving their data to the cloud storage by selecting service providers, such as Microsoft Azure, Amazon Web Services, and Google Cloud Platform. The demand for storage as a service (STaaS) has also increased because of the reduced cost, better scalability, and high availability of storage.

Active government initiatives that are attracting IT investments

Various governments across ASEAN are introducing initiatives and measures to attract IT-based investments in the country, in a bid to develop their respective countries as key digital hubs. In more emerging countries such as Myanmar and Vietnam, the government has continued to invest in basic telecommunications infrastructure and networks.

Meanwhile, in more mature countries (e.g., Singapore) and countries experiencing higher data center services revenue growth rates (e.g., Malaysia, Thailand), governments have been embarking on numerous Smart City initiatives as part of their Digital Transformation roadmap. Key tenets of these initiatives are the need for data center modernization, as well as third-party outsourcing of edge data centers for latency-sensitive applications.

Increase in data center technology spending

In 2016, Southeast Asia’s IT infrastructure market was valued at US$6.28 billion and the UPS segment is expected to reach a market value of US$490 million by 2021. Recent announcements of data centre relocation in the region include Facebook, which in September 2018 announced that it will be spending $1bn (S$ 1.4bn) to build a data centre in Singapore, its first in Asia.

The facility is expected to open in 2022. Google’s move reflects a growing interest in Indonesia as an alternative to Singapore, traditionally the focus of cloud service investment because of its good fibre connectivity.

Amazon is expected to invest 14 trillion rupiah (US$924 million) in the country over 10 years, initially focusing on cloud services.

These moves have been welcomed by the Indonesian government, who aims to make Indonesia ASEAN’s largest digital economy by 2020 through the implementation of its Digital Economy Vision.

Malaysia and Thailand also hold important positions in the top Southeast Asia data centre destinations ranking.

Growing data center complexities

Complexity in the data center drives increased costs, reduced agility and even downtime. For the past five years, virtualization has been the accepted cure and hence Managed Hosting has gained prominence with adoption among large Enterprises and SME’s alike.

Growing need for reduction of CAPEX and OPEX

Data center owners are increasingly becoming considerate of the CAPEX spent on commissioning mission-critical data center facilities and are looking for ways to reduce cost and improve Return on Investment. Data center services, such as consulting provide the required feasibility consulting and cost estimation required for setting up new data centers. Moreover, these services provide for risk assessment and optimum ROI.

Services such as training and development help in generating awareness regarding the best data center practices, thereby further improving the efficiency of data center professionals and increasing the ROI. In addition, data center support and maintenance services help in reducing the downtime and failure, thus further lowering unwanted OPEX and improving ROI. These added benefits of data center services are expected to propel the global service market for data center over the forecast period.

Market Restraints

Increased Demand for third party services

Factors like growing demand for third party data center services including vendor specific in-house data center services act as constraint to the growth of the Data Center Services Market. Demand for data center space in ASEAN is higher than supply, with providers running at 80-90 percent capacity and closed bookings for planned expansions, a market analysis firm reported Thursday.

The analysts are expecting a 37.4-percent growth rate in the third-party data center segment. Disaster recovery services are driving up the adoption of third-party data center services by large enterprises. The Increased demand for third party services is restraining the market due to the outsourcing of Data Center Services thereby exposing private data.

Rising costs

Rising costs associated with Data Center operations such as power, real-estate costs and manpower costs affects the business metrics such as EBITDA and ROIC. The ROIC gets affected by the variable costs such as power which resulted as a consequence of shortage in power supply and rising real-estate prices as a result of boom in the real-estate market particularly in the hub of the ASEAN Data Center markets such as Singapore and Malaysia and higher price tag associated with the pay for skilled manpower.

Lack of internationally recognized data center providers within ASEAN countries

The Lack of internationally recognized data center providers within ASEAN countries continues to be a growth hampering factor. The lack of internationally recognized data center providers shows lack of visibility and awareness about the opportunities present in the ASEAN Data Center Services market. The lack of internationally acclaimed data center providers hampers the entry of new entrants into the ASEAN market.

Industry Challenges

Maintaining Availability and Uptime

Even today, ensuring the uptime of mission-critical applications has never been more important. Enterprises depend on third-party service provider infrastructure services to keep their businesses going. An in-depth Infonetics Research survey found that companies were losing as much as $100 million per year to downtime.

Although the consequences of outages vary by industry, organizations agree that recouping lost revenue and rebuilding corporate reputation can be difficult. While natural disasters and equipment failures cannot be avoided, their impact on downtime can be mitigated through planning and automation.

Security Risks

The top five most Security threats to a data centre are:

DDoS attacks
Web application attacks
DNS infrastructure: attack target and collateral damage
SSL-induced security blind spots
Brute force and weak authentication

Lack of Skilled Professionals

The Lack of Skilled Professionals in Data Center Services market is far from reality. For one thing, the staffing needs of data centers are complex, ranging from facilities people to keep the power supply and cooling dependable, to people at the cutting edge of networking technology to keep the data center doing what data centers are supposed to do — keep data flowing.

A workforce is fading and training programs falling behind the data center, and edge advancement is making staffing difficulties for data centers in ASEAN

Technology Trends

Private Clouds

Many organizations are shifting to the cloud. However, they would prefer not to give up control. Enterprises will utilize data centers to deploy private cloud infrastructures. According to the IDC survey, more than 28% of cloud spending being focused on the private cloud. In 2019, the market back toward a more balanced hybrid approach to IT.

Thus, software solutions like Azure Stack will be utilized to provide cloud services to business clients without removing their information from the corporate-controlled condition.

Public cloud infrastructures will be utilized where required, and however, end clients don’t mind where their services are given from. Data centers will keep on facilitating services to putting the workloads where they can be performed best and most securely.

High-Performance Computing

While HPC (High-performance computing) has turned out to be accessible as an open cloud service, the expansion in AI (Artificial Intelligence) and ML (Machine Learning) based applications implies HPC accessibility will become crucial for companies looking to maintain a cutting-edge advantage.

While trials and prototyping might be done utilizing a public cloud framework, large organizations are probably going to need total, end-to-end control as AI and ML applications turn into a critical business differentiator. It can be most effectively given in a corporate data center.

Other Key Market Trends

Shortage of Talented Specialists

The Shortage of Talented Specialists in Data Center Services market is far from reality. For one thing, the staffing needs of data centers are complex, ranging from facilities people to keep the power supply and cooling dependable, to people at the cutting edge of networking technology to keep the data center doing what data centers are supposed to do — keep data flowing.

A workforce is fading and training programs falling behind the data center, and edge advancement is making staffing difficulties for data centers in ASEAN

Market Size and Forecast

Singapore Data Center Services Market Size

USD 550.75 Million – The estimated market size of the Singapore Data Center Services Market in 2018
15.8% – The expected CAGR growth rate of the Singapore Data Center Services market in the forecast period 2018 to 2025
USD 1,537.85 Million – The estimated market size of the Singapore Data Center Services Market in 2025
USD 204.9 Million – The estimated market size of the Singapore Managed Hosting Service Market in 2018
16.5% – The expected CAGR growth rate of the Singapore Managed Hosting Service market in the forecast period 2018 to 2025
USD 596.8 Million- The estimated market size of the Singapore Managed Hosting Service Market in 2025
USD 345.9 Million – The estimated market size of the Singapore Colocation services Market in 2018
14.8% – The expected CAGR growth rate of the Singapore Colocation services market in the forecast period 2018 to 2025
USD 908.96 Million – The estimated market size of the Singapore Colocation services Market in 2025

Malaysia Data Center Services Market Size

USD 330.46 Million – The estimated market size of the Malaysian Data Center Services Market in 2018
16.1% – The expected CAGR growth rate of the Malaysian Data Center Services market in the forecast period 2018 to 2025
USD 939.6 Million – The estimated market size of the Malaysian Data Center Services Market in 2025
USD 122.93 Million – The estimated market size of the Malaysian Managed Hosting Service Market in 2018
16.7% – The expected CAGR growth rate of the Malaysian Managed Hosting Service market in the forecast period 2018 to 2025
USD 362.37 Million- The estimated market size of the Malaysian Managed Hosting Service Market in 2025
USD 276.7 Million – The estimated market size of the Malaysian Colocation services Market in 2018
14.9% – The expected CAGR growth rate of the Malaysian Colocation services market in the forecast period 2018 to 2025
USD 731.56 Million – The estimated market size of the Malaysian Colocation services Market in 2025

Indonesia Data Center Services Market Size

USD 264.36 Million – The estimated market size of Indonesian Data Center Services Market in 2018
16.3% – The expected CAGR growth rate of Indonesian Data Center Services market in the forecast period 2018 to 2025
USD 760.77 Million – The estimated market size of Indonesian Data Center Services Market in 2025
USD 98.34 Million – The estimated market size of Indonesian Managed Hosting Service Market in 2018
16.9% – The expected CAGR growth rate of Indonesian Managed Hosting Service market in the forecast period 2018 to 2025
USD 293.38 Million- The estimated market size of Indonesian Managed Hosting Service Market in 2025
USD 166.02Million – The estimated market size of Indonesian Colocation services Market in 2018
15.2% – The expected CAGR growth rate of Indonesian Colocation services market in the forecast period 2018 to 2025
USD 447.02 Million – The estimated market size of Indonesian Colocation services Market in 2025

Thailand Data Center Services Market Size

USD 220.3 Million – The estimated market size of Thailand Data Center Services Market in 2018
16.5% – The expected CAGR growth rate of Thailand Data Center Services market in the forecast period 2018 to 2025
USD 641.65 Million – The estimated market size of Thailand Data Center Services Market in 2025
USD 81.95 Million – The estimated market size of Thailand Managed Hosting Service Market in 2018
17.2% – The expected CAGR growth rate of Thailand Managed Hosting Service market in the forecast period 2018 to 2025
USD 248.91 Million- The estimated market size of Thailand Managed Hosting Service Market in 2025
USD 138.35 Million – The estimated market size of Thailand Colocation services Market in 2018
15.7% – The expected CAGR growth rate of Thailand Colocation services market in the forecast period 2018 to 2025
USD 383.98 Million – The estimated market size of Thailand Colocation services Market in 2025

Philippines Data Center Services Market Size

USD 154.21 Million – The estimated market size of Thailand Data Center Services Market in 2018
16.7% – The expected CAGR growth rate of Thailand Data Center Services market in the forecast period 2018 to 2025
USD 454.58 Million – The estimated market size of Thailand Data Center Services Market in 2025
USD 57.36 Million – The estimated market size of Thailand Managed Hosting Service Market in 2018
17.3% – The expected CAGR growth rate of Thailand Managed Hosting Service market in the forecast period 2018 to 2025
USD 175.27 Million- The estimated market size of Thailand Managed Hosting Service Market in 2025
USD 96.84 Million – The estimated market size of Thailand Colocation services Market in 2018
15.6% – The expected CAGR growth rate of Thailand Colocation services market in the forecast period 2018 to 2025
USD 267.15 Million – The estimated market size of Thailand Colocation services Market in 2025

Vietnam Data Center Services Market Size

USD 132.18 Million – The estimated market size of Vietnam Data Center Services Market in 2018
16.6% – The expected CAGR growth rate of Vietnam Data Center Services market in the forecast period 2018 to 2025
USD 387.31 Million – The estimated market size of Vietnam Data Center Services Market in 2025
USD 49.17 Million – The estimated market size of Vietnam Managed Hosting Service Market in 2018
17.4% – The expected CAGR growth rate of Vietnam Managed Hosting Service market in the forecast period 2018 to 2025
USD 151.14 Million- The estimated market size of Vietnam Managed Hosting Service Market in 2025
USD 83.1 Million – The estimated market size of Vietnam Colocation services Market in 2018
15.4% – The expected CAGR growth rate of Vietnam Colocation services market in the forecast period 2018 to 2025
USD 226.49 Million – The estimated market size of Vietnam Colocation services Market in 2025

Market Outlook

The ASEAN data center services market is estimated to be worth USD 2,203.06 Million in revenue in 2018, representing a growth of 16.3% over 2017. The market will grow at a Compounded Annual Growth rate of 16.3% from 2018 to 2025 to reach USD 6,339.93 Million at the end of 2025.
While there is a greater adoption of managed hosting services, colocation services continue to dominate data center services revenue. colocation services account for the bulk of market revenue at 62.8% in 2018. This will continue to be driven by large enterprises and highly regulated verticals, such as Banking, Financial Services, and Insurance (BFSI), which require strict data confidentiality and complete management control of their operations. In addition, cloud service providers are also generating new demand for colocation as they opt for third-party facilities to host their infrastructure for providing services to customers.
The market size of the Managed Hosting Service is estimated to be USD 819.54 Million in 2018 and is expected to reach a market size of USD 2358.45 Million in 2025
The estimated market size of Colocation services is estimated to be USD 1383.52 Million in 2018 and is expected to reach a market size of USD 3981.48 Million in 2025.

Technology Roadmap

5G Projects

5G is the next generation of wireless networking, and it will affect your data center. 5G has incredible features and can support hundred times more associated devices and thousand times more volume, with ten times lower latency and ten times enhancement in battery life for wireless devices. Regardless of whether 5G isn’t as incredible as the promotion, it will be good.

Edge Data Center

Data centers are not outdated. The legacy tasks they support are still important. As IoT and data proliferate, data centers will continue to scale. Edge is a solution intended to push workloads out of centralized cloud or data centers and closer to clients to prevent delays in data processing.

It functions as the decentralized extension of the campus networks, cellular networks, cloud or data center networks.Edge has become an essential complement to the data center and cloud services to bring computing resources, data, and processing closer to the edge.

Distribution Chain Analysis

Distribution chain for the Data Center Services market can be split into three phases. Phase I consists of data center equipment manufacturers including rack and cage manufacturers, cooling equipment manufacturers, power equipment manufacturers, networking equipment manufacturers and others. It also consists of power supply companies and high-bandwidth internet service providers. Phase II consists of Data Center service providers and phase III encompasses the end users or the organizations that avail Data Center Services.
Phase I representatives’ act as vendors, offering products and services integral for building the physical infrastructure for Data Center Services. In case of wholesale colocation, racks and cages for a colocation data center are built as per the requirement for customer’s data servers.
Data Center Services are type of data centers that lease hardware space and networking bandwidth to organizations that need a system administration supplier at a reasonable expense. Organizations could spend a little fortune making a private data center infrastructure, but by taking advantage of Data Center Services, these organizations can lease the administration of data centers they require, without needing to make the communication framework themselves.
While these data centers are offering server space and expansive networking capability, it is important to understand that Data Center Services facilities are not just online. These facilities are the physical structures used to carry and maintain data centers and ideally located near significant power hubs where they can take advantage of the accessible connectivity.

Competitive Landscape

Majority of colocation service providers in the industry are adopting expansion strategies to address the increasing demand for colocation data centers from each of the industry verticals. For instance,

In May 2015 Interxion has entered into a partnership with Microsoft to provide Azure ExpressRoute solutions at its colocation data center for deployment of Microsoft cloud.
In March 2017, HPE announced the launch of Pointnext, which is a technology services organization. The organization helps companies to accelerate their digital transformations and make desired business outcomes
In May 2016, Schneider Electric launched StruxureWare Data Center Operation v8.0, which is a DCIM suite. The launch is expected to optimize the performance and enable business growth through new service offerings for clients
In February 2016, Dell announced that its IT infrastructure, including servers, storage, networking, firewalls, and backup supported Distributech and InvestorCOM to achieve transformational growth through SaaS offerings

Competitive Factors

Reliability and Availability

Data Center must be reliable in order to deliver the utmost in user productivity. If Data Center Services is expected to play a major role in increasing user productivity it has to be reliable, dependable and consistent in its delivery.

This is no easy task. When Data Center is down, productivity is down, and users and enterprise customers are dissatisfied. The unreliable delivery of Data Center services will damage the reputation of Data Center.

It will be harder to regain the user’s confidence to return to the Data Center functions than it was to convince the user to try Data Center in the first place.

Technology vendors and providers often throw around the term five nines (99.999%) availability when discussing their products or services, and the Data Center Services market is no different. The term is used so often that the average technologist doesn’t think twice about it. First of all, five nines does NOT refer to reliability.

It refers to availability. Availability is the probability that a device or service will be working when you go to use it.Thus the Service Provider offering higher reliability and availability are set to dominate the market.

Scalability

The Data Center Services requires to answer the rising demands during peak hours. Enterprises encounter fluctuations in voice call volume and demand for data services. The business can encounter massive spike in inbound customer service calls anytime now.

Regardless of whether the same demand is encountered the Data Center provider must scale to meet demands is important. The Service Providers that offer scalable solutions are the front-runners in the Sector.

Lowest Total cost of Ownership

The Service Providers that focus on reduction of tangible costs and enable correct choice between long distance network vendors are set to rule the market.

Key Market Players

Keppel Data Centres is the manager and operator of premier data centres across Asia-Pacific and Europe. Through its parent company, Keppel Telecommunications & Transportation Ltd, It has more than a decade of experience in designing, building and managing data centres that support its clients mission-critical systems.

PT XL Axiata Tbk is an Indonesia-based mobile telecommunications services operator. The operator’s coverage includes Java, Bali, and Lombok as well as the principal cities in and around Sumatra, Kalimantan and Sulawesi. XL offers data communication, broadband Internet, mobile communication and 3G services over GSM 900 and GSM1800 networks.

Telstra Corporation Limited (known as Telstra) is Australia’s largest telecommunications company which builds and operates telecommunications networks and markets voice, mobile, internet access, pay television and other products and services. Telstra has a long history in Australia, originating together with Australia Post as the Postmaster-General’s Department. Telstra is now fully privatised and was undergoing a change program to become more customer focused

Equinix, Inc. is an American multinational company headquartered in Redwood City, California, that specializes in internet connection and data centers. The company leads in global colocation data center market share, with 200 data centers in 24 countries on five continents.

NTT Communications or NTT Com, is a subsidiary of Nippon Telegraph and Telephone (NTT) Corporation, the largest telecommunications company in Japan and one of the largest worldwide. NTT Com provides network management, security and solution services to consumers, corporations and governments.

Other Prominent Players in the ASEAN Data Center Services Market includes

Strategic Conclusion

The major challenges pricking the growth of the ASEAN Data Center Services market includes Maintaining Availability and Uptime, Security Risks and Lack of Skilled Professionals

The growth of the market is restrained by factors such as Increased Demand for third party services, Rising costs, Lack of internationally recognized data center providers

The growth of the ASEAN Data Center Services market is augmented by driving factors such as Growth of Hyper scale Cloud Vendors, Active government initiatives that are attracting IT investments, Increase in data center technology spending, Growing data center complexities, Growing need for reduction of CAPEX and OPEX

Appendix

EB – Exa Bytes
DCIM – Data Center Infrastructure Management
OT – Operational Technology
SME – Small and Medium Enterprises
STaaS – Storage as a Service
UPS – Uninterrupted Power Supply
CAPEX – Capital Expenditure
OPEX – Operational Expenditure
EBITDA – Earnings before interest, tax, depreciation and amortization
ROIC – Return on Invested Capital
DDoS – Distributed Denial of Service
DNS – Domain Name Server
SSL – Secure Socket Layer
HPC – High-performance computing
AI – Artificial Intelligence
ML – Machine Learning