Mega-Clouds Drive Shift to Mega-Data Centers in Singapore

In addition to being one of Asia’s primary commercial and financial hubs, Singapore is a hub for international connectivity, with landing stations for submarine cables linking it to major Asia-Pacific markets in India, China, Japan, and Australia, as well as the numerous emerging markets in the region, such as Thailand, Vietnam, Indonesia, and Singapore’s next-door neighbor Malaysia. In short, if you want network access to virtually all Asia-Pacific markets from one place, that place is Singapore. The city-state’s robust infrastructure, political stability, and a business-friendly government also help.

There are 45 data center providers in Singapore as of 2016, with 53 unique operational data centers, according to Structure. Together, their critical power capacity is 240MW. The two top providers in the market are local telco Singtel and the Redwood City, California-based colocation giant Equinix. The two companies have a combined share of 55 percent in the Singapore data center market. Other top providers are Digital Realty Trust, Keppel Data Centers, Global Switch, and NTT Communications.

Not all demand for data center capacity in Singapore is coming from cloud giants of course. There are plenty of examples of smaller companies, such as system integrators and other IT service providers from China and elsewhere overseas, taking data center space in Singapore to serve clients throughout AsiaPacific.

Some of the recent examples include Retarus, a Munich-based messaging service provider, which announced a new data center in Singapore last month. The company lists Adidas, Bayer, Sony, and Honda as its clients. Another one is Fpweb.net, a St. Louis, Missouri-based managed cloud and security services firm, which announced a data center in Singapore earlier this month, promising it would reduce latency for its clients in Southeast Asia.

While data center providers building in Singapore are mostly after the lucrative multi-megawatt cloud deals, they generally don’t pigeonhole themselves into being strictly wholesale or strictly retail providers. A company may prefer wholesale deals but it will sign retail colocation deals as well, Tan said. It goes the other way too. Equinix, for example, a company that specializes in retail colocation inside its network-rich facilities, has done some wholesale deals in Singapore, he said. Equinix usually makes the exception if a major strategic customer wants a wholesale deployment.

Tan was not confident there would be enough demand for all the new wholesale capacity coming online in the 2016-2017 timeframe. Lots of empty facilities and only so many deals to go around usually means pricing for wholesale data center space will come down. “It’s pretty aggressive in terms of chasing after deals in Singapore,” he said.