As the Asia Pacific races ahead with 5G-enabled technologies, internet infrastructure needs to adapt to edge computing requirements

The fourth industrial revolution, also called Industry 4.0, is changing the enterprise landscape around the world and this will shape how internet infrastructure like data centers evolve over the next few years. The Asia Pacific region is leading the rest of the world in the implementation of Industry 4.0 technologies [1] and this is starting to impact the choices being made for data center build outs in the region.

Fifth generation mobile telephony, (5G), once it becomes mainstream, will provide the ideal bandwidth that Industry 4.0 requires, and it will become the central point of all enterprise activities.

Connections on 5G are vital for the new technologies that Industry 4.0 will usher in. Faster and more stable connectivity, along with low latency of these new networks, allow for transformational applications like untethered robots on factory floors and driverless cars, all part and parcel of the fourth industrial revolution. A typical 5G network can offer bandwidth exceeding one gigabit per second (Gbps) and extremely low latency in the region of 10 to one millisecond as compared to 20-30 milliseconds that existing networks offer [2]. Low latency is the killer app that allows for a host of new technologies and applications that were previously not possible [3].

Industry 4.0 covers a wide gamut of technologies and applications. Disruptive technologies like AI, big data analytics, industrial IoT, 3D printing, and others are blurring the line between what is digital and what is physical on factory shop floors, in offices, hospitals, educational institutions, and virtually every space of human activity. Industry 4.0 is destined to provide unprecedented opportunities for innovation and progress in all facets of society [4].

Along with Industry 4.0, the use of IoT (Internet of Things) devices both in industrial use cases as well as other areas such as tele-medicine will rise exponentially once 5G networks are up and running. Companies are already adjusting to this expected rise in IoT use-case volumes. According to Frost & Sullivan, communication service providers (CSPs) are working with Asia Pacific IoT vendors to expand their solution portfolios to monetize the IoT opportunity by developing data management platforms and integrating advanced artificial intelligence (AI) driven analytics capabilities. This is expected to be a US$424.2 billion opportunity by 2025, up from the current market value of US$70 billion in 2019 [5].

PwC adds that [1] , the growth of digitalization in Asia Pacific can be attributed to the fact that the manufacturing industry itself is young in the region. With less legacy infrastructure, companies in this region are leapfrogging their American and European counterparts by integrating and adopting new technologies.

How does this affect data center infrastructure?
With 5G allowing for faster data transmission speeds, the use of technologies like augmented reality (AR) and virtual reality (VR) on untethered mobile devices will go up exponentially. This will, in turn, lead to a massive jump in the amount of content generated in the market [6]. There will be a requirement for more storage capacity and data centers will need to use multiple cloud-based technologies to store and manage the exponential increase in data that 5G networks will bring.

All this has largescale implications for data center infrastructure. For low latency applications, business organizations and telecommunications service providers are adopting edge computing to limit the distance between the data source and the end user. Edge computing requires local interconnected data centers to operate efficiently. The new networks require the processing of data at local nodes rather than at a centralized data center or cloud [7].

It is expected that 5G technology will influence and change data center design in a way very similar to how Artificial Intelligence (AI), and AR/VR have changed industrial practices. The technology will boost the flow of highly-robust and engaging user experience, which will make it necessary for the data centers to improve their processes and infrastructure to deal with such highly-innovative content and technologies [6].

Architecture upgradation
Due to better efficiency and bandwidth, 5G networks enhance data efficiency and can serve user data at nearly 100 times the rate associated with existing 4G networks [6]. This will make it necessary for the data centers to introduce operations that can manage resource-intensive data without compromising on energy consumption and cost.

Traditional data center architecture will have to be upgraded in order to bring the compute and storage closer to the end-user. As mentioned earlier, this has major implications for Asia Pacific’s fast-growing internet infrastructure market.

This is best achieved with flexibility in data center design and this applies to all types of data centers, whether they are sitting at the edge of the network or centralized hyperscale data centers. What works best is a hybrid and multi-cloud set-up [8]. Almost all organizations will use the cloud and a combination of edge computing, colocation, and hybrid solutions to ensure that all types of data center requirements can be met and there is maximum interaction between data obtained from emerging technologies.

Distributed networks will be a key element in this new data center architecture. Many hyperscalers already have distributed network systems inside the data centers. Cloud-scale data centers and larger enterprise facilities will be less affected as they are already using distributed processing and are designed to handle the increased data flow from the edge [9].

Research agency Gartner predicts that by 2025, three-quarters of enterprise-generated data will be created and processed at the edge – outside a traditional centralized data center or cloud. That’s up from just 10 percent in 2018 [10]. As the Gartner numbers indicate, in order to take advantage of faster speeds and lower latency that 5G networks provide, companies will use AI to produce actionable intelligence from real time information and this will dramatically increase the use of edge computing. Global Market Insights estimates that the edge data center market will reach US$16 billion by 2025 globally [11].

Multi-tenant data centers will have to move closer to the edge to provide regional points of presence for cloud-scale facilities. We are already seeing this happen in the Asia Pacific region as large multinational data center operators establish points of presence in major countries and regions. A good example of how companies and countries are adjusting to this new reality is Indonesia, which has become a new hotspot for hyperscale data center investment [12] as internet infrastructure operators feel the need to have a local presence in this potentially large market. The country is expected to see investments worth over US$1 billion and an annual growth rate of 11 percent between 2019 and 2025. The report adds that more than US$600 million in data center construction opportunities for contractors is projected during 2019-2025, while the colocation data center market will witness growth of around US$300 million.

While it is safe to say that data centers will need huge changes to accommodate and enable 5G, there is still a lot that is unknown. New 5G networks will accelerate the deployment of machine learning, deep learning, and other AI based technologies within an Industry 4.0 framework in the Asia Pacific region. This represents both an opportunity as well as a challenge for data center operators. If they can adopt the right networking, computing, and edge data center technologies to support AI, they will emerge as winners [13].

The right data centers will be AI-driven and have the ability to process vast amounts of data, low latency, and seamless connectivity to the edge. Princeton Digital Group (PDG) with his local presence and expertise in key Asia Pacific markets can be a vital partner and enabler in the move to next generation technologies and data centers.

About PDG
Princeton Digital Group (PDG) is a Warburg Pincus-backed investor, developer, and operator of internet infrastructure. Our portfolio of data centers powers the expansion of hyperscalers and enterprises in the world’s fastest-growing digital economies. Our agility, speed and unmatched experience in scaling global internet infrastructure provide our partners and customers immediate access to growth opportunities across Asia. To engage with us, email us at

Stephanus Tumbelaka

Author Stephanus Tumbelaka

Managing Director, Indonesia at PDG

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