Data centers: Vietnam’s bright spot
Under the impact of Covid-19, many activities have moved to online platforms and amount of data uploaded has been increasing.
According to a report by technology company Technavio, Southeast Asia is an important region driving the growth of global data centers.
Troy Griffiths, Deputy General Director of Savills Vietnam, said that digital infrastructure has never been more important to the economy than it is now. During the firstCovid outbreak, from February to mid-April 2020, global internet traffic increased by nearly 40%, fueled by growth in video streaming, online conferencing, online games and social networks.
In 2020, 59% of the global population was connected to the Internet. This figure was only 26% in 2010. Global Internet traffic increased 12 times. The amount of data collected rose at an unprecedented rate with the continuous development of the Internet of Things (IoT), artificial intelligence (AI), virtual reality (AR) and blockchain. By 2026, the global data market is expected to reach US$251 billion with an average annual growth rate of 4.5%.
According to research firm Cushman & Wakefield, the Asia Pacific data center market is the fastest growing and is on track to become the largest in the world over the next decade.
The growth is mainly driven by huge markets like Tokyo and Shanghai along with tier 1 markets such as Singapore, Mumbai, Sydney and Seoul, and emerging Southeast Asian markets as Hanoi, Ho Chi Minh City, Bangkok, Kuala Lumpur and Jakarta.
According to Research and Markets, Vietnam is one of 10 emerging markets on the global data center map. The growth driver is believed to come from the booming e-commerce market, and the growing cloud computing and financial technology (fintech) businesses.
Ms. Trang Bui, General Director of Cushman & Wakefield, said that with political stability, no terrorism and few natural disasters like earthquakes, Vietnam has the necessary characteristics to become a major data center in the region.
The Vietnamese data center market grew 12.69%/year in the period 2016-2020 with a market size of $858 million in 2020. The market is forecast to have an annual growth rate of nearly 15% through 2026.
Regarding cloud computing, the scale is predicted to increase to $291 million in 2024. The Vietnamese market currently has more than 40 businesses providing cloud computing services.
New data centers formed
Vietnam has about 27 data centers located in big cities with diverse sizes, quality, and standards. The overall market is estimated at 45MW, with several new operators and developers looking to add more supply to the market in the short to medium term.
About 80% of data centers are operated by local telecommunications companies such as VNPT IDC of the Vietnam Post and Telecommunications Group (VNPT), Viettel IDC of Viettel Group or FPT Telecom of FPT Group.
Customers are mainly companies in the fields of telecommunications and information technology, banking and finance, insurance, and government.
In June 2022, Gaw Capital Partners completed the acquisition of a land plot in the HCM City High-Tech Park to develop a Level 3 Data Center, expected to be completed in 2024.
Some other names include CMC Telecom, KDDI Corporation, Hitachi Asia (Vietnam), Hewlett Packard Enterprise, SAP Vietnam, IBM Vietnam Company Ltd., Microsoft Vietnam and Amazon Web Services Vietnam.
Viettel and FPT plan to expand their data centers with investment of hundreds of million USD from now through 2030.
According to Decree 53 detailing a number of articles of the Cybersecurity Law, Vietnam’s data must be stored in the country.
World suppliers like Amazon and Microsoft wanting to expand in the Vietnam market must have plans to use data storage services of domestic suppliers. Foreign suppliers are looking for investment opportunities in data center projects in Vietnam.
Source: mic.gov.vn
