Data centres: Investment, drive and a cautious approach

Data centre

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Anand Chandrashekara, APAC Relationship Manager, Axis Communications argues that the Asia-Pacific region is fertile ground for data centre growth – but is not without its challenges.

The APAC region represents a shining investment opportunity for those wishing to get in on the ground floor, as it were, in the building of accelerated digitalisation.

The Global South is a melting pot of new technologies – 5G deployments, smart city projects, medical advancements, an increasing reliance on AI and a rise of general populous computing.

These all make the region a highlight growth market, one which presents an increasing need for cloud services and data centres.

APAC is set for great advances, but the region is not without its challenges if operators are to deliver that progress.

Energy supply and demand

Energy availability remains a barrier for data centre expansion worldwide. Data centre operators are aware of the steady growth in demand and the need to prioritise robust available supply above all else. Interestingly, the APAC region leads the world in supply growth.

Between 2018 and 2023 the compound annual growth rate of data centre live supply in APAC was 19.1%, compared to 16.7% for the Americas and 13.6% in EMEA. But the level of desire for expansion in the APAC region is not yet matched by the pace of energy infrastructure growth.

In order to improve the volume and reliability of supply, developing nations facing economic disparity need the investment and commitment of data centre operators. Conversely, operators need a consistent energy supply and the additional capacity to expand if required.

Grids are hardening and solar is steadily growing, but both demand money, time and physical space. Certain APAC countries may even have reached their limit: Singapore had just 4MW of capacity to offer as of July 2023 and the highest energy lease fees in the world.

Land and construction cost considerations

Growing utilisation of innovative technologies has created an exciting landscape, but the issue of limited capacity is equalled by the issue of land and construction costs.

Moving data centres to more rural locations might be an obvious response, but land with suitable available power is scarce.

What’s more, raw materials, transport prices and energy supply fees remain at an all-time high throughout the world – and construction costs have risen sharply to match.

Some data centre businesses are waiting to invest in new locations until a market correction occurs, electing instead to expand existing operations. That is not to say that APAC’s data centre growth has stalled. China, Australia, India and Japan are rising fast in the world rankings.

But, operations cannot be ring-fenced only into the most tech-forward nations, particularly given the volume of data protection and data sovereignty legislation enacted in the region over the past half decade and those laws which are still to come.

Culture and character differences

APAC represents a broad spectrum of nations with little commonality and, in the case of areas like India, vast cultural and economic differences even within national borders.

Demand for data is uneven, skewed by disproportionate wealth distribution; divisions of language and political trust can create barriers which delay harmonious development; potentially volatile areas of the region add uncertainty, complexity and ambiguity which can hamper enthusiasm for investment.

This is true of large scale data centre development and is also true down the chain.

There is growing concern surrounding the tech used by data centres in low income countries and its selection based on price rather than performance.

Data centres cannot be part of a race to the bottom, because the potential impact of data breaches or unavailability are massive.

Operators must select hardware throughout the data centre which puts reliability and cybersecurity first, no matter the cost.

Working with proven technology

Basic cost/benefit analysis is not enough for data centres eager to push what are often difficult limits of power and bandwidth.

They must search for truth. Proof of concept – actual, tangible proof – must be considered a vital component of product selection.

Whether this comes from data sheets featuring accurate metrics or a robust program of first-hand testing, it is both up to vendors to supply data centre operators with technology which demonstrably meets their needs and also on operators to select their vendors on this basis.

Given the importance of regulatory compliance and a robust digital architecture which keeps customer data safe, security is a prime factor.

With the cybersecurity landscape constantly changing, only devices which consistently harden their defences through upgrades, updates and testing will suffice – and vendors must demonstrate a security-first approach by embracing encrypted communications and secure, signed firmware.

APAC’s continued growth requires investment, drive and a cautious approach to risk management.

Many parts of the puzzle are held by national governments and will only be solved with time, investment and significant public and private pressure.

But, a large part of the risk factor can be mitigated if operators use technology that is fit for purpose.

A smarter, safer world is built on hardware which is secure by default and which works as it should – not as it merely claims.

About the Author

Anand HC is responsible for managing the Key Global End Customers across Asia Pacific and has specialised in data centres since 2020.

Prior to his present role, he held multiple sales and business development roles with Axis for more than a decade in the fast-growing region.

Axis Communications

Axis enables a smarter and safer world by creating solutions for improving security and business performance.

As a network technology company, Axis offers solutions in video surveillance, access control, intercom and audio systems.  

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