The Changing Data Centre Landscape in APAC. Saravanan Govindan Associate, BroadGroup

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1 The Changing Data Centre Landscape in APAC Saravanan Govindan Associate, BroadGroup

2 BROADGROUP CONSULTING PRACTICES CONTENT SERVICES EVENTS & TRAINING DIVISION Leading content driven Brands engaging audiences internationally across distinct research sectors DATA CENTRES TMT FINANCE Report Library - Focused research commissioned by BroadGroup TMT Finance & Investment Series Middle East 2009 Asia 2009 Finance & Investment Forum for Data Centres London 3 December 2009 INFRASTRUCTURE CLOUD CONSULTING SERVICES Management Consulting Commercial Due Diligence Demand Analysis Customer Segmentation Pricing Analysis Marketing Research Business Case & Financial Analysis Competitor Research & Analysis Technical Audits Newsletters researched by BroadGroup and provided free of charge Web Portals Data Centres Series Regional conferences - Europe, Asia, Middle East and Latin America Data Centre Security Power & Cooling for Data Centres Dark Fibre Convention PoweredbyCloud Data Centre Bootcamp Specialist Training

3 DATA CENTRE TRENDS Significant growth is expected - Data Centres continue in expansion mode through 2015 Supply of data centre space has lagged demand growth across all 5 markets of Singapore, Malaysia, Thailand, Indonesia and Vietnam This has led to the rush in data centre developments Disaster recovery and business continuity services are rapidly growing areas of data centre services. These services have become crucial to both governments and corporations as threats from terrorism and natural calamities are considered increasingly likely Regional partnerships will increase in size and number: Customers have presence across multiple markets in South East Asia. Data centres will follow their customers through collaborative partnerships Older stock too small/not compliant with enterprise CSR requirements can t compete Further consolidation likely Winners will own pan-asian data centre networks those in position to acquire/adapt buildings/build in strategic locations should do so in next months

4 PAN ASIAN DATA CENTRES ACHIEVING SCALE 4 countries/10 data centres Colocation/Managed Services 35 Data Centre Alliances across Asia/Europe/N America 6 countries/9 data centres Colocation/Managed Services Greater China/10 data centres Colocation/Managed Hosting Asia/N America/Europe - 27 data centres Colocation/Managed Services International Data Centre Players

5 SUSTAINED INVESTMENT IN ASIA New Internet Data Centre in Singapore and the TGN-Intra Asia Cable US$480m Super IDC in Asia part of AT&T s US$1 billion planned global network investment "Asia-Pacific Information Engine" Announced for Guangzhou (China Telecom & Guangzhou Tianhe Software Park) investment of 400 million Yuan 16,000 sq.m Data Centre

6 DATA CENTRE VALUE CHAIN FOR THE ENTERPRISE Movement occurring up and down the value chain as Enterprise requirements change OUT SOURCING DISASTER RECOVERY MANAGED SERVICES STORAGE MANAGED HOSTING COLOCATION

7 DATA CENTRE AND THE ENTERPRISE Massive increase in Data video / new media / transactions Storage requirements DR/BC Compliance and New Regulation (more to come...) More complex software Power costs (40-60% of OPEX) Core competency of business Risk of obsolescence in equipment investment Corporate Social Responsibility requirements Carbon efficiency Upgradeability of enterprise data centre Cost, cost, cost... CRITICAL CHALLENGES QUESTIONS FOR THE ENTERPRISE What is Real Data Centre Lifecycle? Built with current technology? investors and operators use years Product obsolescence? Will new Products such as Data Centres in a Box /mobile data centres cause obsolescence? Will new technologies commercialize soon Eg Nano cooling? Core competency/opportunity Should enterprises own and manage Data Centres? many concluded to outsource already... But many still have not

8 IMPACT OF DEMAND DEMAND ESCALATES As demand requirements in Asia escalate same problems will replicate across the region that have already occurred in Europe and US OPERATIONAL PROBLEMS Data centre power consumption and huge source of carbon emissions Power costs traditionally shared across business units shift as cost of running data centres accelerates Even with efficiency improvements, enterprises face potential legislative penalties (US and Europe) fear In US -- projected quadrupling data centre carbon emissions by 2020 OUTCOMES Data Centre cost as percent of total revenue all time high In some cases Data Centre cost growing twice as rapidly as revenue Data Centre construction investment now significantly affects profitability for next two years Data centre facilities spend (CapEx and OpEx) is arguably inefficient portion of IT spend impact on profitability.

9 VERTICALS BROADBAND DEMAND STANDARDS DRIVEN BANKS/FINANCIAL SERVICES Data growth (Banks seeing % annual growth in data requirements) Compliance and regulation (Sarbanes Oxley, Basel II, MiFID, + more to come Increased willingness to part or wholly Outsource to 3 rd party operators Requirements security, redundancy, DR/BC Media LEGISLATION/COMPLIANCE HIPPA Carbon emissions NEW DEMAND SEGMENTS Government Broader Corporates SURGE IN USER DEMAND Greater usage of broadband and Internet ( fuelled by consumer demand for Internet services Yahoo!, ebay, Amazon.com, Google, PayPal, itunes, MySpace, YouTube, Skype, Facebook, WiFi, 3G etc...) IP Traffic should nearly double every two years through to 2011 with consumer IP traffic growing at 58% and business IP traffic at 21% (source: Morgan Stanley) YouTube accounts from anything from 2-10% of all Internet traffic VIDEO SURGE IN VIDEO billion video streams sent 2007 Many New Apps will be video based SOLUTIONS BLADE SERVERS Blade Server demand STANDARDS BS25999 SS507 SOA ISO DATA CENTRE (Coming soon) CRISIS DRIVEN DATA CENTRES Lack of Power / cost of power 40-60% of OPEX Utilization rates Upgradeability of Data Centres Location (near Power source)

10 FORECAST MARKET SHARE BY SPACE TO 2015 Predicted and Optimistic Outcomes 250, , , , , Singapore Malaysia Vietnam Thailand Indonesia By 2015 combined Australia/NZ Data Centre Capacity approximately same as that of Singapore India will have more than 5 x Capacity of Singapore All figures in sq.m Forecast Growth in Data Centre Space to 2015 (Source: BroadGroup)

11 TOP TEN PLAYERS IN SOUTH EAST ASIA (BY SPACE) Malaysia highest number of players in top SingTel Expan (S) Global Switch (S) Netmyne/Myloca (M) HPT Vietnam AIMS (M) CSF Advisors (M) Freenet (M) Equinix (S) Kompakar (M) Jaring (M) Top 10 Players in South East Asia (by Space) (Source: BroadGroup)

12 FORECAST MARKET SHARE BY SPACE: 2015 Singapore and Malaysia lead SE Asian markets 32% 55% Singapore Malaysia Vietnam Thailand Indonesia Forecast Market Share in Data Centre Space 2015 (Source: BroadGroup)

13 WHAT IS DRIVING GROWTH? Enterprises main driver in developed markets Singapore Malaysia Vietnam Thailand Indonesia 10 0 Corporate Finance Telecom Public Sector Other Demand Drivers by Market S E Asia (Source: BroadGroup)

14 EVOLUTION OF MANAGED SERVICES MODEL Traditional Outsourcing Managed Services Dedicated Infrastructure Client Owned Located at Customer Premises Dedicated or Shared Infrastructure Client or MSP Owned Hosted by MSP Shared Infrastructure MSP Owned Hosted by MSP

15 MANAGED SERVICES ENTERPRISE DEMAND DRIVERS Shared Services Virtualization Important for SMEs and Public Sector Efficiency in Data Centre Enterprise Complexity creates opportunity to manage virtualized environment SOA and Web Services Convergence SaaS Enterprise adoption SOA and Web 2.0 opportunity to manage complex environment Enables IT to be delivered remotely Dependent on remote infrastructure and networks as well as need for applications to be properly maintained Data Storage Rapid growth rate of transactions, e-commerce and legislative requirements Green IT Security Focused drive for efficiency and cost reduction Managed security, DR and contingency

16 MANAGED SERVICES GROWTH SEGMENTS Financial Services Media Financial Services: Slower growth but increasing need for converged telephony/ Network Media: Key Target for MSPs On demand service platforms Growth in network and storage demands Content Distribution Networks Retail: On demand models of IT consumption Retail Public Sector Public Sector: Growing interest in shared services model (security, value, transparency)

17 Thank You!