APDCA Launch Report

APDCA Launch Report

1. How will the Data Centre
Industry Support Rapid Digital
Growth and Innovation in Asia?

2. Data Centres:
Physical Home of Data
In today’s hyper-connected world, every
aspect of our professional and personal
lives is deeply reliant on data. A web of
interconnected infrastructure – data cen-
tres, subsea fiber optic cables, wireless
towers, satellites – forms the backbone of
global digital connectivity on which our
modern economy and society depend.
Whether it’s checking the news, social
media or ordering meal deliveries on our
phone; sending and backing up emails;
streaming entertainment or communicat-
ing with friends and colleagues 10,000
miles away – our ability to work, com
-
municate, and recreate is increasingly
underpinned by the Internet. This accel-
erated demand for digital services is only
projected to grow with adoption of 5G,
artificial intelligence (AI), IoT, and further
expansions of cloud computing. The explo-
sive growth in digitalisation, e-commerce,
and digital banking in countries such as
India, Indonesia, Thailand and Vietnam
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3. present not only strong opportunities but
urgent need for managed facilities.
1
Data
centres are buildings that house and con-
nect the vital digital infrastructure that all
our modern-day applications run on. They
are purpose-built, professionally managed
facilities that house data for networks,
content, cloud and financial service pro-
viders, the public sector, and other key
organisations that support our everyday
way of life.
While ongoing data centre development
is spread across global regions, Asia out-
paces others with the largest percentage
of new deployments (see Figure 1). The
APAC data centre colocation market alone
is expected to grow at a compound annual
growth rate (CAGR) of 8.02% to reach
a value of $19.08 billion by 2028 (from
$12.01 billion in 2022).
This growth is primarily attributed to fac-
tors such as robust government support
for investments, expansion in industrial
zones, rapid development of submarine
cable networks, entry of global coloca-
tion companies into the region due to
customer demand, and investments from
cloud service providers.
2
Looking forward, there are a number of
industry factors and policy discussions
which will have the potential to determine
the region’s collective resilience and capa-
bility to respond to critical data needs.
Figure 1: Share of new data centre sites to be deployed by region

4. The growing demand for cloud, virtuali-
sation, and the practical need for scalable
growth, while maintaining control of data
and compliance with regulations, are
fueling a change in how data is housed
across industries. It has resulted in a shift
from servers being maintained in enter-
prise-managed “IT closets” to modern
data centres, which are dedicated facili
-
ties designed to house, power, cool and
secure IT equipment in the most efficient
way possible.
In fact, a 2020 study of data centres glob-
ally found that while computing power
jumped sixfold from 2010 to 2018, data
centre energy consumption rose only 6%.
Professionally designed, built and run
wholesale colocation data centres allow
for on-premises equipment and work
-
loads to be moved to dramatically more
efficient settings.
3
Retail colocation data
centres also uniquely allow customers
to interconnect (via direct fiber connec
-
tions) with ecosystem partners in their
facilities,
4
enabling the direct exchange
of data between organisations, which
reduces latency and cost, and improves
security and performance. Further, the
shift to colocation and distributed infra
-
structure can also help address several
issues around control over data and regu-
latory compliance.
Future colocation expansion has the
potential to aid in the growth of services
such as cloud connectivity and hybrid
infrastructure services. The adoption of
cloud connectivity solutions is projected
to grow at a rate of 25% in Asia-Pacific
through to 2026.
5
Retail colocation ser-
vices in APAC will continue to grow as
the shift from traditional server room infra-
structure to data centres accelerates in
several developing countries.
6

Ensuring that data centre operators are
working closely with governments to
address opportunities, challenges and
solutions as the industry grows will be key
to driving the sustainable development of
digital infrastructure needed to support
continued innovation.
The Shift from Server Rooms
to Data Centres

5. Advancements in generative AI and the
rapid maturation of large language mod-
els (LLM) are expected to further drive
demand for computing resources and data
centres with higher density deployment
levels. Data centre operators have stepped
up to meet environmental responsibilities
by being at the forefront of innovation in
exploring new ways to ensure that their
facilities run with maximum efficiency.
Realising the benefits of energy-intensive
new applications while meeting ambitious
climate targets will require adoption of
new, more efficient methods of cooling.
In parts of Asia that are susceptible to
extreme heat or drought, innovation in
water usage to cool data centres as well
as sharing of best practices will be criti-
cal. For example, many data centres now
utilise air-cooled chillers that recirculate
water in a closed loop, drastically reducing
their water use. Many data centre opera-
tors are piloting new projects around water
discharge and carbon emissions with the
potential to meaningfully change the game
in data centre sustainability.
The data centre industry is a major buyer
of renewable energy, and this has a signif-
icant impact on the energy mix. In seeking
expanded use of renewable energy, the
industry has traditionally been a driver
of demand for renewable energy devel
-
opment in global markets. Governments
across the region are also cognisant of the
issue, and are working on policies to boost
sustainability efforts. Enhanced public-pri-
vate collaboration to expand production
and access to clean and renewable energy
would be vital to maintaining the sustain-
able growth of data centres across the
region. The APDCA will work alongside
governments to drive meaningful impact
in this area.
Demand for Sharper Strategies
on Sustainable Growth

6. Security and Resilience
of Data Centres
As key sectors of the economy are
increasingly dependent on data centre
reliability and performance, ensuring the
uninterrupted operation of services is a
primary focus of data centre operators.
Industry standards for power uptime are
99.999%, and operators deploy advanced
security equipment, techniques and pro-
cedures to control and monitor access to
their sites. While outages are becoming
less common, their impacts are widely
felt when they do occur.
7
Operators are
continuously investing in best practices to
reduce the risk of downtime incidence and
deliver resilient services.
The centrality of data centres to economic
and strategic well-being has translated
into additional policy action, ranging from
strengthened regulation in some jurisdic-
tions (to designate data centers as part
of critical national infrastructure [CNI] in
some countries, for instance) to capac-
ity building on digital infrastructure in
emerging economies. Data centres are
increasingly seen as a crucial element for
global leadership in emerging technolo-
gies such as AI.
As our lives become more intertwined with
data and our communities are becoming
digital first, through such technologies as
mobile banking, ride-hailing, food delivery,
and financial services, governments in the
region are exploring regulations to address
national security issues associated with
data management. Accelerating digital
adoption and improving citizen experience
is a key aspect of several government ini-
tiatives across the region.
The growth of the data centre industry has
enabled the development and deployment
of new technologies and products, which
require ever-greater data capacity and the
ability to scale at higher speeds. In one of
the fastest growing, most data-intensive
regions in the world, the APDCA has been
formed as a collective voice to work with
governments across Asia-Pacific in co-de-
veloping policies that align with national
priorities, drive the sustainable develop-
ment of robust digital infrastructure, and
deliver lasting benefits to local communi-
ties in which they operate.

7. Endnotes
1 IT News (2021) Why Asia Pacific’s data centre demand is surging,
https://www.itnews.asia/news/why-asia-pacifics-data-centre-demand-
is-surging-562226
2 IT News Online (2023) Asia-Pacific Data Center Colocation Mar -
ket Outlook Report 2023-2028, https://www.itnewsonline.com/
PRNewswire/Asia-Pacific-Data-Center-Colocation-Market-Outlook-
Report-2023-2028-Featuring-Key-DC-Investors---AirTrunk-Operating-
Digital-Realty-Equinix-GDS-Services-Keppel-NTT-NEXTDC--ST-Tele-
media/956398
3 Forbes (2023) Working At Full Power: Data Centers In The Era Of AI,
https://www.forbes.com/sites/forbestechcouncil/2023/10/30/working-
at-full-power-data-centers-in-the-era-of-ai/?sh=b8550ec3ab02
4 Colocation or multitenant facilities host more than one tenant that colo-
cate their IT equipment in individual secure cages that are in proximity
to various digital services, customers, vendors or mission partners.
5 IDC (2023) Public Cloud Services in Asia/Pacific to Reach $153.6 Bil-
lion in 2026, According to IDC Forecast, https://www.idc.com/getdoc.
jsp?containerId=prAP50555123
6 BCG (2021) The Future of Cloud in Asia Pacific, https://web-assets.
bcg.com/17/91/e6cd678e4256b635b0c4c29ad127/the-future-of-
cloud-in-asia-pacific.pdf
7 Uptime Institute (2022) Uptime Institute Global Data Center Survey
Results 2022, https://uptimeinstitute.com/resources/research-and-re -
ports/uptime-institute-global-data-center-survey-results-2022