3 Drivers for Co-location Data Centre Growth

Asia is Leading Co-location Data Centre Growth

Around the world, Asia is leading the demand for co-location data centre growth, according to a blog post by Mark Bidinger, the segment president of cloud and service providers at Schneider Electric. There is tremendous growth in the number and scale of data centres built in the Asia Pacific, which is home to 60 per cent of the world’s population.

What are the factors behind this demand? We look at three of the top drivers.

Taking a call in the office

Surging Internet Growth

We are witnessing a dramatic economic shift as the world transition into the Fourth Industrial Revolution, which is fuelling the growth of digital economies in Asia. Indeed, the Internet economy in Southeast Asia with 350 million users is projected to potentially exceed US$240 billion by 2025, according to a report by Google and Temasek.

This is driven by the huge number of users logging on to enjoy the vast trove of information and services available online. Though many do not realise it, the thousands of websites, e-commerce stores and online services accessed online are all served from data centres, of which many more will be needed to meet this surging demand. What’s more, with internet penetration at just 48.1% as of 2018 – significantly below the rest of the world at 62.2%, the evidence points to many more years of growth ahead.

Fast Mobile Adoption

The adoption of mobile devices has been astounding, with more than a billion addition mobile phone users expected between 2015 and 2020. And 10 countries account for the bulk (70%) of this growth, with many of them from Asia. India and China are leading the charge on this front with 55% of global subscriber growth, while Indonesia – the fourth most populous country in the world, is also growing rapidly with a growth of 9.3% in 2018.

Father and daughter enjoying time over ipad at home

In many developing countries, a smartphone purchase may often precede that of an air conditioner or even a refrigerator – an unsurprising development given how an entry-level smartphone costs much less than the cheapest laptop or desktop. The result is a mobile-savvy population who now use their mobile devices for a host of digital activities such as surfing websites, communicating on chat applications, banking, shopping online and sharing their lives on their favourite social media platforms.

Edge Data Centres

It is no secret that network latency is the enemy of performance and the antithesis to good customer experience. This is especially the case with the proliferation of Internet-of-Things (IoT) appliances, where everything from lighting, household appliances and wearables are increasingly connected to the Internet.

Data centre for co-location data centre growth

While many connected devices can function well in low-latency environments, applications such as virtual reality (VR) applications and autonomous vehicles may not work correctly without continuous communication to backend servers housed within data centres.

To cope with the predicted tsunami of demand, more data than ever are expected to be stored closer to consumers in facilities known as edge data centres. These are essentially smaller data centres that can be located nearby – either within the same city or town, in the building two blocks away, or even the server room within the office.

Ultimately, the increasing demand for data centres represents a huge growth opportunity for co-location providers in Asia. While there are inevitable societal changes and infrastructure-based considerations that will surely arise from the need for more data centres, these are problems that an organisation such as Schneider Electric is well-positioned to solve.