ABSTRACT
Data centre demand in Asia has held up in the face of the economic slowdown, with cloud computing a strategic driver for Data centre development over the next few years, according to industry observers.

FULL DOCUMENT
Adrian Dominic Ho, program manager for telecom, managed services, networking and outsourcing at IDC Asia-Pacific, said in an e-mail interview that demand for hosting services has remained fairly strong even during the downturn. "Here in Singapore, almost all the data Centres are full and operating close to full capacity," he noted.

Steve Wallage, managing director of BroadGroup Consulting, concurred. In an e-mail to ZDNet Asia, he said Data centre demand in Southeast Asia slowed in early 2009, but bounced back in the second half of the year. Market momentum in 2010, he added, has also been strong.

The Asia Data Center Alliance (ADCA) also reported strong growth in 2009, and a positive outlook for this year. "On average, all members in ADCA have seen business growth ranging from approximately 20 percent to 57 percent and expect to see, conservatively, Data centre business growth of 18 percent to 30 percent in the next 12 months," a spokesperson said in an e-mail.

Enter the cloud
According to Wallage, the region\'s third-party Data centre market--including co-location and managed services--will see growth rates of more than 20 percent over the next few years. "This will be driven by strong overall Data centre demand, greater usage of outsourcing prompted by better-quality facilities, and the move toward cloud computing and hosted services."

The analyst noted that companies such as Savvis "are very focused" on cloud computing, to the extent of encouraging "some co-location users to leave their facilities to make way for cloud users".

He maintained, however, that traditional services will continue to constitute the bulk of the Data centre business. "The single biggest opportunity for the third-party industry is the over 90 percent of Data centre and server room space that is currently in-house or in-sourced."

IDC\'s Ho pointed out that verticals such as government and the financial services tend to own and manage their data stores, but "a lot" of service providers are building up their facilities to offer cloud services. Over the next few years, the trend will shift "big time" in favor of hosted data Centres, he said.

Hewlett-Packard also provided an indication of the potential boost the cloud may provide, via the recent opening of HP Labs Singapore. One of the strategic thrusts of the newly-opened research facility is to redesign data Centres to meet cloud computing needs.

The ADCA spokesperson noted that the alliance members are expanding their facilities to cater to the growth from cloud computing. "Our fellow members, for example the TCC Technology (TCCT)...is now opening the new phase of Green Premium Facility in the eastern of Bangkok for another 16,000 sq ft to support strong demand from both local and multinational companies.

"TCCT [has also] started expanding the coverage to the northern part of Bangkok with plans to launch another new data center within two years," he said. "1-Net [in Singapore] is also commissioning another 20,000 sq ft of Data centre space within the next two months to support customer\'s high power density hosting requirement and cloud computing. "

Leow Tet Sin, managing director of Japan Land, told ZDNet Asia in an e-mail that the company sees cloud computing as "another market driver" boosting demand for a commercial data center, as opposed to the more traditional customer-owned data center. His company controls the largest standalone data center facility in Singapore.

Singapore one of favored Asian locations
Last month, Japan Land officially opened the S$250 million (US$178.6 million) Jurong Data Centre in Singapore. Covering 200,000 sq ft, the facility counts among its customers OpenNet, the consortium responsible for building the fiber infrastructure for Singapore\'s National Broadband Network.

Leow added that Japan Land is optimistic about the potential of the Data centre market in Asia and will explore opportunities "to participate in more Data centre projects" in Singapore and the rest of the region.

"We foresee solid and continued demand across the region on the back of the growing trend by companies to outsource their IT operations, and believe our involvement in two prominent Data centre developments, in Singapore and Japan, will position us well to capitalize on this growth," he said.

According to BroadGroup market research findings, the downturn has led users and investors to focus on three main cities in the Asia-Pacific region: Hong Kong, Singapore and Tokyo, with much of the recent activity based in Singapore. Other markets that have observed strong demand include Australia, Malaysia and Thailand.

With the rising number of data Centres in the region, the landscape will get more competitive. IDC\'s Ho noted that providers need to focus on the level of uptime as well as security. In addition, some organizations will look for more than just hosting services, and those with a broader range of capabilities will possess an advantage.