APAC to emerge as second largest data center and hosting market by 2023, says GlobalData

With a significant number of companies expanding to serve their global client base, the Asia-Pacific (APAC) region is set to witness a strong growth in terms of data center and hosting services revenue. Against this backdrop, the market is estimated to reach around US$32bn by 2023, behind only to North America, says GlobalData, a leading data and analytics company.

According to GlobalData’s Market Opportunity Forecasts Model, enterprises are increasingly migrating their existing resources to data centers to reap benefits from data.

Sunil Kumar Verma, Lead ICT Analyst at GlobalData, comments: “The data center and hosting market growth in APAC will be driven by growing demand for cloud services and digitization from both enterprises as well as the investors.”

Though the North America region will be the largest in terms of overall revenue market share with 34.3% in 2023, APAC will have market share of nearly 30%, followed by Western Europe (nearly 24%).

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Verma adds: “The APAC region provides the leading vendors with unique benefits in terms of costs, continuous investment in connectivity infrastructure upgrades and capability to serve broader set of customer requirements in their pursuit for digital transformation.”

By 2023, China will be the largest market accounting for about 36% of the overall market opportunity in APAC, followed by Japan and Australia with 22% and 8.3%, respectively.

The region is expected to witness increased interest from the leading vendors to leverage the existing opportunity in the region. For instance, in early 2019, Chayora opened first of its planned nine data centers in China, whereas Alibaba opened its second data center in Japan and Indonesia. AWS launched Asia Pacific (Hong Kong) data center region in April 2019. Hyperscale data center provider AirTrunk opened its second data center at Sydney in November 2019.

Sunil concludes, “Investment will continue in new datacenter projects by existing and new entrants with a view to expand their presence in the region and serve additional customers. Additionally, with the commercial availability of 5G services in the next 1-2 years, data consumption is expected to grow multiple-folds. This will result in constant connectivity requirements as well as data center supported features, for supporting the critical business applications and activities of the enterprises.”

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