A Diverse Landscape

To get a framework for how major and secondary data center markets work in a certain part of the world, it’s important to understand the regions of the area. For example, in the United States, the larger data center markets include Northern Virginia, Chicago, Phoenix, Dallas, and Northern California. In Europe, there’s Frankfurt, London, Amsterdam, Paris, and Dublin (often referred to as “FLAP-D”).

Turning to Asia-Pacific, the three major cities that immediately come to mind are Singapore, Sydney, and Hong Kong. What makes the APAC data center market so unique is the cultural diversity it represents. This leads to certain markets operating in near isolation because of the cultures they represent.

Japan is seeing growth in Tokyo and Osaka. China has Shanghai and Beijing. On top of that, there’s an increasing amount of capacity across Southeast Asia, which includes Jakarta in Indonesia, as well as Vietnam and Thailand. And last, but certainly not least, there’s significant activity in India where huge amounts of growth can be expected in the coming years. These unique areas come with their own potential, but supply challenges can still exist anywhere.

Market-Specific Challenges

Supply chain challenges and issues delivering power infrastructure continue to pop up all around the globe, and the APAC market is no exception. In Singapore, for example, the government has placed a moratorium on new construction. While this has put a halt on the breaking of new ground, it’s also made it difficult for those who are in the process of building new sites, as the price of building materials continues to rise.

Of course, this issue is specific to Singapore, but that doesn’t mean it’s without a ripple effect. The Sydney market, and Australia in general, has continued to experience steady demand and even seemed to benefit from the slowdown in Singapore. This trend is one we’ve seen happen worldwide—where lack of infrastructure or capacity in one area has pushed demand to a neighboring location (which happens often in the U.S.).

While Singapore has slowed down at the moment, it still remains an important market to keep an eye on in light of its strategic importance. The same can be said for Hong Kong, which represents the gateway into the China market and where power is relatively inexpensive.

Following the Hyperscale Trend

Hyperscale data centers are driving the conversation (and the demand) all around the world, and Asia is beginning to see this play out. While we’ve seen significant investment in subsea fibers that have come from hyperscale centers, Asia is still in the early stages of this process. Part of the reason they’re behind the likes of Europe and the U.S. is because of the sheer size and scale of many of their markets.

India, for example, requires hyperscale operators to develop a completely new and unique strategy. While a large scale and scope of activity may sound like it means there’s more to go around, it has actually led to increased competition as hyperscale operators look to meet the various needs of hyperscale customers.

However, hyperscale is only a piece of the puzzle when it comes to Asia. The entrepreneurial energy that exists across all the various markets means new organizations with new technologies are placing new demands on data centers. Being on the edge of new developments certainly means that the data center markets will continue to grow in both demand and capacity.

Both primary and secondary markets are poised for growth, so the question one has to ask about the APAC data center market isn’t if it will continue to grow, but how fast.