Data Center - Southeast Asia

Southeast Asia

Revenue in the Data Center market is projected to reach US$11.17bn in 2024.
Network Infrastructure dominates the market with a projected market volume of US$7.58bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 5.23%, resulting in a market volume of US$14.41bn by 2029.
In global comparison, most revenue will be generated in the United States (US$123.20bn in 2024).

Key regions: United States, Germany, India, Japan, China

Definition:

The Data Center market is a critical segment of the technology industry focusing on supplying and managing physical infrastructure necessary for hosting and operating IT systems, primarily servers, storage, and network equipment. This market spans from traditional in-house data centers to sophisticated facilities offered by specialized providers, covering services like hosting, shared data center facilities, and managed data center solutions. It targets a diverse client base, ranging from small businesses to large enterprises, offering flexible, scalable solutions for their IT infrastructure needs. This sector is integral to the efficient functioning and security of IT operations in various organizations.

Structure:

The Data Center market is structured in three markets based on the services model provided by the companies.

The Server market covers the resources and services related to servers, integral for hosting websites, managing databases, and supporting cloud computing.
The Storage market covers the resources and services related to data storage systems, crucial for archiving, data backup, and ensuring data recovery.
The Network Infrastructure market covers the resources and services related to network hardware essential for ensuring connectivity, data transmission, and network security.

Additional Information:

The Data Center market includes revenue, revenue change, average spend per employee, and key player market shares as key performance indicators. Market values represent revenues paid to primary vendors at the manufacturer price level either directly or through distribution channels (excluding VAT). Revenues are generated through both online and offline sales channels and include spending by consumers (B2C), enterprises (B2B) as well as governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed.

Key players in the Data Center market include companies such as Dell, HPE, Huawei, and Ericsson.

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Market

Region

Region comparison

Currency

Analyst Opinion

The Data Center Market in Southeast Asia is facing slow growth due to various factors such as limited investments in servers, storage, and network infrastructure, as well as increasing competition from cloud-based services. Additionally, the region's reliance on traditional IT infrastructure is hindering the adoption of digital technologies, impacting the market's growth rate. However, rising demand for data storage and processing capabilities is expected to drive growth in the long term.

Customer preferences: As more businesses and organizations in Southeast Asia move towards digitalization and remote operations, there is a growing demand for reliable and secure data center services. This shift is driven by the need for efficient and scalable IT infrastructure to support the region's rapid growth in e-commerce, cloud computing, and digital services. Additionally, the increasing adoption of Internet of Things (IoT) devices and Big Data analytics is expected to further drive the demand for data centers in the region.

Trends in the market: In Southeast Asia, the Data Center Market is experiencing a surge in demand for cloud-based solutions, driven by the increasing adoption of digital transformation strategies by businesses. This trend is expected to continue, as companies seek to improve their operational efficiency and reduce costs through the use of data center services. Additionally, there is a growing emphasis on sustainability and green initiatives in the region, with data center providers implementing energy-efficient practices and utilizing renewable energy sources. This shift towards sustainability is significant not only for the environment but also for industry stakeholders, as it can lead to cost savings and improved brand image. Furthermore, the rise of edge computing and the Internet of Things (IoT) is creating new opportunities for data center providers, as more devices and applications require low-latency and high-bandwidth connections. This trend is expected to drive the growth of edge data centers in Southeast Asia, providing new revenue streams for industry players.

Local special circumstances: In Southeast Asia, the Data Center Market is driven by the rapid growth of cloud computing and the increasing adoption of digital technologies in the region. The market is also influenced by the unique regulatory landscape, with each country having its own data privacy and security laws. Additionally, the region's diverse cultural and geographical factors, such as varying levels of internet infrastructure and digital literacy, impact the demand for data center services. For example, in Indonesia, the market is driven by the government's efforts to boost the digital economy and the country's large population of smartphone users. In Singapore, the market is shaped by the country's status as a global business hub and its world-class connectivity and infrastructure.

Underlying macroeconomic factors: The Data Center Market in Southeast Asia is heavily influenced by macroeconomic factors such as technological advancements, government policies and investment in infrastructure. Countries with strong government support and significant investments in digital infrastructure are experiencing a faster growth in the data center market compared to regions facing regulatory challenges and limited funding. Moreover, the increasing adoption of cloud computing, big data analytics, and Internet of Things (IoT) technologies are driving the demand for data centers in the region. Additionally, the growing digital transformation across various industries and the rising demand for data storage and management solutions are further propelling the growth of the data center market in Southeast Asia.

Methodology

Data coverage:

The data encompasses B2B enterprises. Figures are based on hardware-related expenses of businesses for setting up and maintaining an IT infrastructure.

Modeling approach / Market size:

Market sizes are determined through a top-down approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports and national statistical offices. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP and level of digitization. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques, such as exponential trend smoothing and the S-curve function, is based on the behavior of the relevant market.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.