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What does 2016 hold for Asia’s data centre market?

Clement Goh, Managing Director Southeast Asia, Equinix | Dec. 22, 2015
The data centre sector has been part of a sea of change over the years, and 2016 looks set to be no different, says Clement Goh of Equinix.

This vendor-written piece has been edited by Executive Networks Media to eliminate product promotion, but readers should note it will likely favour the submitter's approach.

Data centres have long been evolving from their original role as simple data warehouses, and today they play a crucial multi-faceted role, delivering entire IT ecosystems to increase business value.

As the data centre market continues to evolve, we peek into our crystal ball and share predictions for the industry in 2016.

Cloud service providers will continue to fuel data centre growth
Over the past 16 months we have seen a shift in types of organisations driving data centre demand -- moving from multinational corporations, IT solution providers, large telecommunications players, and financial service institutions to cloud service providers. The growth in demand from these providers has been fuelled by the shift to hybrid cloud models by many enterprises, as well as the outsourcing of latency-critical, non-sensitive servers and applications to the cloud.

The financial services industry, which was initially the slowest to adopt cloud solutions, is now taking the lead, with some companies in the industry outsourcing 100 percent of their IT infrastructure.

The rise of bundled managed services is putting smaller, niche cloud service providers and pure storage vendors at a disadvantage, with many likely to lose market share to larger providers that can offer a full suite of services.As a result, we can likely expect more mergers and acquisitions within the industry in the next year to support this consolidation of IT services.

Companies like Equini xsit at the epicenter of these types of managed services, acting as the platform of choice to support cloud service providers in the provision of services to their customers. 

More enterprises will tap into the value of Interconnectivity
Interconnectivity will take centre stage in 2016 as tomorrow's enterprises become increasingly interdependent and explore opportunities to collaborate in real-time to build offer new products or services.

Ubiquitous user access and a host of external business and IT suppliers means enterprises are having to manage multiple points of engagement with more end-users and business partners than ever before. The demand currently placed on existing IT architectures will quickly become overwhelming and cause a shift towards distributed, interconnected infrastructure.

 According to our 'Enterprise of the Future' report, there is a rapidly accelerating global demand for interconnection.The survey revealed that there is significant momentum behind the adoption of interconnection-dependent IT strategies by enterprises seeking to drive revenue growth and the data centres of tomorrow will need to support this increasing demand for interconnection.

Singapore set to maintain lead as regional data centre hub
According to Structure Research, revenue in the Singapore commercial data centre market amounted to approximately US$1 billion in 2014 and is predicted to grow by 20 percent by 2016.The city-state currently accounts for about 50 percent of South-East Asia's data centre capacity.


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