Rising Cost In DC Hubs Shifts Spotlight To New Markets

The traditional datacentre hubs of Hong Kong and Singapore are being confronted with several operational hurdles such as space restraints, higher realty prices and increasing operating costs. This is causing service providers to evaluate alternate low-cost locations such as Malaysia, India and China for further expansion in the region.

Analysis from Frost & Sullivan, finds that the market earned revenues of over US$2.55 billion and US$3.03 billion in 2010 and 2011 respectively. This is estimated to reach US$9.25 billion in 2017.

“Most datacentres are working at high utilisation levels and service providers are hard pressed to identify the right locations for new datacentre build outs that provide the required infrastructure, at a sustainable price,” said Frost & Sullivan Research Analyst Mayank Kapoor. “Market participants are adopting virtualisation, consolidation and cloud computing to alleviate some of these cost pressures.”

Further, the growing adoption of high-density blade servers is resulting in escalating power and cooling requirements. The latest power and cooling technologies will reduce the overall demand for datacentre space, as they enable better packing of efficient blade servers.

Meanwhile, renewed corporate growth in the Asia Pacific in 2010 has given impetus to organisations’ business expansion efforts.

“As the outlook for North America and Europe is not very promising, global businesses are focusing their efforts on Asia Pacific to drive the next phase of corporate growth,” said Kapoor. “Global service providers have identified this as an opportunity and are beefing up their presence in the region, as an increasing number of businesses are looking at third-party service providers to supplement or replace their captive facilities.”

Service providers are virtualising a greater part of their servers and incorporating Green IT best practices across facilities. Future datacentres will also have higher power densities, be carrier neutral and be built in low-cost locations.