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Sustainability crucial for Southeast Asia as region set to deliver fastest data center growth

Sustainability crucial for Southeast Asia as region set to deliver fastest data center growth

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Southeast Asia is projected to be the fastest-growing region for data centers, according to a new study by Digital Realty and Eco-Business, with 89% of regional experts surveyed expecting significant data usage growth in the region over the next five years.

Digital Realty, a leading global provider of carrier and cloud-neutral data center, colocation and interconnection solutions, and Asia Pacific sustainability media platform Eco-Business published the key findings in a report titled The Future of Data Centers in the Face of Climate Change

“Southeast Asia has emerged as a highly sought-after region, with Singapore accounting for an estimated 60% of the region’s total data center supply,” said Mark Smith, Managing Director, Asia Pacific for Digital Realty. “While Singapore’s stable, pro-business environment, low-risk geographic features and abundant connectivity options make it an attractive destination for data center players, the country needs to remain competitive in the face of rising competition. Singapore has a tremendous opportunity to fortify its regional leadership and build upon its position as a sustainable global data center hub in the post-pandemic world.”

According to the study, respondents highlighted a lack of environmental awareness (71%), lack of investment (65%) and lack of collaboration from stakeholders (61%) as key challenges to making data centers more sustainable. 

The report highlighted Southeast Asia’s tropical climate and policy gaps as additional impediments to the region’s long-term growth as a competitive and sustainable data center market.

“Southeast Asia is home to some of the fastest-growing economies in the world, and its rapid development will accelerate the demand for data services,” said Jessica Cheam, Managing Director, Eco-Business. “Against this backdrop, it is crucial that data center providers find a way to meet this need while ensuring they are playing a part in helping countries meet their climate targets.” 

The study emphasized that cooling needs represent 35%-40% of total data center energy demand. Energy-efficient cooling technologies and processes – including liquid cooling – represent a significant opportunity for data center operators to reduce energy usage as well as costs.

“It is encouraging to see that most customers in the region view sustainability as a key consideration when choosing a data center provider,” said Aaron Binkley, Digital Realty Senior Director of Sustainability.

“This aligns with Digital Realty’s position on sustainability and our commitment to bringing our emissions in line with a significantly below two-degree climate change scenario by 2030. We believe cooling technology will be a game-changer for data centers, especially in Southeast Asia’s tropical climate.” 

The new report also identified Indonesia and Malaysia as rapidly developing, rising stars which are expected to expand their share of the region’s data center pie. Both countries offer ease of access and lower cost of entry than Singapore. They also have a young, fast-growing and sizable base of digital and tech-savvy consumers, which drives a dynamic e-commerce and technology industry.

In terms of sustainable growth potential, both countries have an abundance of land mass for data center operations to expand, which gives them the physical capabilities to generate their own supply of renewable energy.

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