Issue link: https://cp.revolio.com/i/584904
www.datacenterjournal.com 10 | THE DATA CENTER JOURNAL hoT MarkeTs g eographically, the APAC region is huge. Moreover, it encompasses a variety of cultures, histories and economic conditions. ink, for instance, the wealth and relative freedom of Hong Kong versus the tyranny and crushing poverty of North Korea. Naturally, then, the conditions for the data center market will vary. According to George Rigby, Associ- ate Director–Asia Pacific for Cushman & Wakefield's Data Centre Advisory Group, Singapore is currently at the top of the list for the region. e tiny island nation at the southern tip of the Malaysian peninsula "is the largest data center market in the APAC region, with a significant 240 MW of total supply, 205 MW of which is utilized," said Rigby. He predicts that an additional 120 MW of capacity will come online by 2018. e nation of about five million to six million people and less than 300 square miles nevertheless packs a wallop in this market. Rigby notes, "Despite a scarcity of land, Singapore has several attributes that make it a host country conducive to data centers, including its advantageous geographic location, stable power supply, political stability and pro-business regula- tory environment." ese attributes—par- ticularly the reliable power—are critical to running a data center. But moreover, "Singapore is also spared from natural di- sasters such as earthquakes and typhoons which affect many neighboring countries." It has also garnered interest from a variety of investors looking for safe opportunities overseas, giving it broader appeal even beyond the data center market. Another strong market is Hong Kong, whose historically free economy has made it an attractive target for investors. Roughly on a par with Singapore in terms of size, population and gross domestic product, Hong Kong is an economic center of China, having joined that nation in 1997 aer a long history as a British ter- ritory. Rigby notes that "demand in Hong Kong is only held back by the scarcity of greenfield sites or suitable properties for conversion." Naturally, the small size of this highly developed region (about 400 square miles) means very different data center real-estate dynamics compared with, say, an expansive nation like the U.S. or even mainland China. rising MarkeTs e hottest markets, however, may not necessarily be the most attractive from a long-term perspective. Particularly for investors, growth markets may be where the action is, albeit with some expected risks. As economies in the APAC region develop further, with both businesses and consumers relying more heavily on digital devices and demanding more services, the need for data center resources likewise increases. In particular, Rigby cites the Philippines and India as major growth markets, although the latter country may be seeing some deceleration. "For India, the pace of growth is unlikely to hit the high-single-digit rates experienced in the last decade," he said. But the greatest momentum seems to be in Indonesia. e archipelago nation of over 250 million people has seen an overall economic growth rate of between 5% and 6% in recent years, according to the CIA's World Factbook. "From a data center perspective the demand rising fast- est at the moment is for Jakarta [Indone- sia's capital]," said Rigby. One situation currently influencing the market is a data-privacy law that covers the financial industry. "e OJK (Financial Services Authority of Indonesia) decreed Regula- tion 82 in 2012, stating that by October 2017 financial institutions need to onshore their Indonesian-related data," he added. "Until now there has been significant lob- bying to clarify, reduce and postpone the requirement. e deadline is not moving and several financial companies are only starting the process now to secure space in a very small and immature market." TechnoLogy MarkeTs In the U.S., although the enterprise data center is by no means dead, momen- tum currently favors outsourcing through colocation and the cloud. e model of transferring costs from capex to opex is particularly well suited to companies that want to focus more on their central busi- ness rather than IT, as well as to an overall economy burdened by heavy debt. De- mand for cloud and colocation resources is likewise increasing in the APAC region, outstripping supply and thus leading to considerable growth. Rigby notes, "Previ- ously when suitable facilities were unavail- able, keeping racks in office buildings may have been the only solution. Landlords are aware of the long rack migration periods and can easily leverage this during office renewals. ere are several financial firms that are acting on a strategy to relocate to new, suitable colocation facilities that are purpose-built, efficient and secure." Although mobile mania in this region may be tilted slightly more toward lower cost compared with western nations (the U.S. and Europe), smartphone and tablet users continue to drive a growing need for more Internet-based services. But resources located halfway around the world will increasingly fail to meet local users' expectations for speed. Rigby added that this demand for reduced latency on the part of the huge APAC population means that the cloud facilities delivering these services must be located nearby, providing impetus to the cloud data center market. econoMic QuesTions Despite its meteoric rise, China currently faces a number of economic concerns that threaten to rattle the entire world economy. e nation of about 1.4 billion people is well known for its malin- vestments in such things as so-called ghost cities: huge urban development projects that have few if any inhabitants. As in the case of poor capacity planning for a data