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Data Centres - Energy-guzzling Business Shows No Signs of Slowing Down Finds Frost & Sullivan - The data centre co-location and managed hosting services market in Asia-Pacific has been going strong for almost a decade, growing in tandem with the rise in business and Internet subscribers
Data Centres - Energy-guzzling Business Shows No Signs of Slowing Down Finds Frost & Sullivan

 

PRZOOM - /newswire/ - Singapore, Singapore, 2010/02/12 - The data centre co-location and managed hosting services market in Asia-Pacific has been going strong for almost a decade, growing in tandem with the rise in business and Internet subscribers.

   
 
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Frost & Sullivan industry analyst Chengyu Wu expects this growth in Asia-Pac to continue at a CAGR (compound annual growth rate) of 14.6 percent (2009-2011) with revenues exceeding US$10.68 billion by the end of 2011.

"Data centre hosting services are a huge, growing business - one that has remained largely insulated from the recession," she says. "As much as two-fifths of a company's total energy consumption is spent on powering data centres, making the cost of maintaining captive data centres highly prohibitive. Real estate, of course, is the other significant cost."

Demand for data centre hosting, Wu adds, currently exceeds supply. "In fact, over 80 percent of the major data centres in Asia-Pacific are running at close to 90 percent capacity and space is at a premium."

New analysis from Frost & Sullivan (communicationservices.frost.com), Asia-Pacific Data Centre Services Market, finds that the market - covering 14 Asia-Pac countries, including Japan - grossed an estimated US$8.0 billion in 2009, growing 12.8 percent year-on-year. Revenues are expected to rise even higher by 14.7 percent this year to reach US$9.18 billion by-end 2010, and by as much as 16.4 percent in 2011.

If you are interested in more information about this study, then send an email to Sarah Lourdes at sarah.lourdes[.]frost.com, with your full name, company name, title, telephone number, company email address, company website and country.

Leading data centre hubs in the region are Japan, Australia, Singapore, Hong Kong and, to a lesser degree, China, India and Malaysia. The largest of them, Japan, alone, accounted for over 71 percent (US$5.7 billion) of the revenues last year.

Much of the growth in most countries is fuelled by strong domestic demand, prompted mainly by government initiatives towards e-governance and e-readiness. Singapore and Hong Kong continue to be prime hubs for regional facilities.

"Government-driven investments into next-generation broadband networks, IT infrastructure build-outs and e-ready nations have created a growing Internet-savvy population that demands rich content, collaboration and web applications," Wu explains. "This demand is the primary driver of the growth in data centre space in the region."

She adds that the Internet media, telecom and IT industries together account for up to 45 percent of the demand. These sectors are still growing at a fast pace in almost all Asia-Pac countries and are expected to continue to be the biggest users of data centre space over the next four to five years.

While the outlook appears highly promising with no lull in demand in sight, data centre operators struggle with the high cost of operations which have increased exponentially in recent times. According to Frost & Sullivan director Jayesh Easwaramony, "Power costs can often account for more than 50 percent of the overall operational expenditure (OPEX) of a data centre, while real estate pricing could also seriously inflate costs.

"Oddly, in Asia, the larger data centres tend to be based in the most expensive cities - Tokyo, Hong Kong, Singapore, Shanghai and Sydney," he adds.

Adding to the rising OPEX, disruptive technologies also pressure data centre operators into upgrading their facilities continuously to keep pace with evolving technologies. For instance, Easwaramony notes, "Many data centres have been compelled to upgrade their cooling system to meet the demand for blade servers, which, while requiring less space, now also consume more energy."

It is estimated that nearly two percent of the world's electricity supply is spent powering data centres.

"The focus on green initiatives has moved rightly in the direction of cost savings rather than corporate social responsibility in the past twelve months," Wu reasons, "with discussions around new concepts such as virtualization, green data centres and utility computing emerging in the data centre segment."

"However, not many data centre owners in Asia-Pac have embraced these in their facilities due to the skills required and the huge cost involved in implementation and maintenance," she concludes, adding that adoption by users has, likewise, been minimal due to inadequate compliance and governance.

The Asia-Pacific Data Centre Services Market study is part of the Communications Services Growth Partnership Service program, which also includes research in the following markets: fixed broadband, infrastructure hosting, next-generation network transformation, converged services, IPTV, online content services, WAN services, and managed and hosted services. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents.

 
 
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Data Centres - Energy-guzzling Business Shows No Signs of Slowing Down Finds Frost & Sullivan

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