Digital needs in China, India and Indonesia are driving the growth of data center services market in the Asia Pacific, says Frost & Sullivan.
Complexities within the IT infrastructure brought about by virtualization and consolidation, and cost constraints, are encouraging enterprises to look into adopting third-party data center services. This is spurring the strong growth of managed hosting in the region.
Colocation services account for 62.8 percent of the data center services revenue in Asia Pacific in 2016, while the balance was contributed by managed hosting services.
Data center services market revenue was $14.13 billion (+15.3 percent) in Asia Pacific in 2016. The market is expected to grow at a compound annual growth rate (CAGR) of 14.7 percent from 2015 to 2022 to reach $31.95 billion in 2022.
Colocation services dominate data center services revenue, as they are driven by large enterprises and highly regulated verticals, such as Banking, Financial Services, and Insurance (BFSI). Cloud service providers are generating new demand for colocation as they opt for third-party facilities to host their infrastructure for providing services to customers.
Some enterprises have selected to bypass management of their IT operations and migrate their services straight to cloud deployments such as Infrastructure-as-a-Service (IaaS). In response to this, many service providers have expanded data center service offerings to include cloud-based offerings as well.
Telecom carriers, wholesale / retail data center service providers, as well as managed service players dominate data center services market in Asia Pacific.
NTT Communications, China Telecom, Fujitsu and Equinix have been positioned in the Champions quadrant, based on a combination of market share performance and future growth strategies as determined by Frost & Sullivan research. The top four vendors accounted for approximately 28.4 percent of the data center services revenue generated in the region.
Singtel, KDDI Telehouse, Telstra, Global Switch, Digital Realty, STT Global Data Centres CenturyLink and Keppel Data Centres have been positioned in the Challengers quadrant. These service providers have demonstrated strong market potential in terms of future growth strategies with regard to go-to-market strategies and breadth of portfolio offerings, among others.
The data center services market is becoming competitive owing to significant data center build-outs in countries such as Japan, Australia, and Singapore.
“This is compounded by the fact that increasing data sovereignty concerns in countries such as Indonesia and China are favoring dominating vendors in the respective countries,” said Ajay Sunder, vice president, Digital Transformation at Frost & Sullivan Asia-Pacific.
