Organizations are upgrading their data center infrastructure to make them eco-friendly, efficient and capable of meeting the needs of the fourth industrial revolution

The Asia Pacific region is witnessing a rapid build-up of digital infrastructure, including data centers, as organizations adopt the tools required to compete in a digital-first economic landscape that is constantly changing as technology evolves.

According to a study done by research agency IDC, in partnership with Microsoft, digital transformation is expected to add an estimated US$1.16 trillion to the region’s gross domestic product (GDP) by 2021 [1]. The study also predicts that the use of digital technologies will surge to account for around 60 percent of Asia’s GDP by 2021.

Access to data is the key and digital transformation projects in the region are geared to provide not only real time access but also analytics that can glean actionable intelligence from the information that companies collect in areas like supply chain, logistics, customer data, and others. The competitive edge of companies is now decided by how efficiently they can use their data to drive business decisions.

The adoption of IoT (Internet of Things), artificial intelligence (AI), and big data analytics is pushing up the demand for high-performance computing infrastructure in Asia [2]. The region’s data centers now house cutting edge technologies like AI analytics, cloud ecosystems, connectivity architectures, and advanced computing platforms [3]. AI and machine learning workloads are expected to contribute over 40 percent in the internet infrastructure investment in Asia Pacific by 2025 [4].

With the data center being the heart of transformational projects, the market is witnessing a steady growth in terms of IT infrastructure procurement, greenfield, brownfield, and modular data center development as well as the high adoption of efficient, scalable, flexible, and reliable infrastructure solutions. As a result, the data center and hosting services market in Asia is expected to be worth US$32 billion by 2023 [5].

Outsourcing services
Automation of IT infrastructure is a key element in a successful digital transformation strategy, and that is what is driving the demand for outsourcing services, such as Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS), in the region. These services provide companies with the ability to outsource components of IT functions to a degree inconceivable even a decade ago.

Using these services, organizations are pushing routine IT functions to specialist cloud service providers (CSPs) while keeping only the most sensitive data or those required to be kept in-house by law on proprietary equipment in a hybrid cloud arrangement [6]. CSPs ensure that operational efficiency is maximized with the use of the latest technology and processes. Their hybrid and multi-cloud solutions provide organizations with the capabilities required to compete in a digital market.

Due to market demand there is a strong presence of data center operators in three categories: IT infrastructure, support infrastructure, and data center investors. From the IT infrastructure perspective, the contribution from Asia Pacific based infrastructure providers as well as global providers like Amazon is almost equal [2].

Another element that is gaining increasing traction in the IT infrastructure market in the region is sustainability. As environmental concerns take centerstage, there is an increased emphasis on green data centers. Led by initiatives taken by top hyperscale data center providers, sustainable data centers are the new normal in cloud computing and urban megacity society and they are key for the coming digital transformation and connected everything era [7].

In the Asia Pacific region, CSPs are investing in data centers that not only enhance capability but are also eco-friendly in that they have better PUE (power usage effectiveness) ratios and this helps decrease carbon dioxide emissions.

This is increasing the demand for energy-efficient and innovative power and cooling infrastructure solutions. Partnership with facility operators will play a vital role in gaining market share. It is because the majority of the providers in the regions have planned to invest millions of dollars in new facility development [2].

With profound changes being ushered in the region due to the fourth industrial revolution [8], organizations need to take a hard look at their systems and processes and, if needed, do an audit to determine whether the existing data center infrastructure has what it takes to anchor new technologies that predicate the adoption of a flexible multi-cloud business environment. Traditional infrastructure concerns have centered on reliability and cost. Additional factors are of concern now are the speed of deployment, flexibility, and manageability of data center infrastructure.

Modern data centers offer substantial new features over legacy facilities that help to monitor various vital parameters like electricity usage and cooling parameters. They are easier to manage and monitor. One of the key features is a modular architecture [9]. With a modular set-up, it is possible to add new resources such as storage and compute when required, and it also gives the ability to move around resources in a plug and play manner when needed. Data center manager can provision resources on-demand and hence there is no need for operators to build redundant capacity into a data center in anticipation of future growth.

Instead of building new facilities that take both time and money, a better strategy for CSPs and large data center users is to outsource to a colocation or hosting provider. This enables organizations to get a new facility online quickly and helps to relieve the staffing challenges that plague many IT organizations. Upfront investments are lower and well-designed facilities offer efficiencies and economies of scale that reduce the total cost of ownership [10].

A smart way forward in the complex and rapidly evolving data center market in the region is to partner with companies that have intimate knowledge of the region and its various sub-markets and are technologically proficient. Princeton Digital Group (PDG) has been investing heavily in the Asia Pacific region to provide cutting edge data center solutions to partners, especially hyperscale operators. With its state-of-the-art resilient data centers and best in class design and data center services, PDG is well equipped to meet the customers’ digital infrastructure requirements.

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. 

Chris Street

Author Chris Street

Executive Vice President, Market Development at PDG

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