Digital Realty: Leading the way in Asia Pacific

Digital Realty: Leading the way in Asia Pacific

Mark Fong, VP of Digital Realty’s APAC and Japan Sales divisions, talks sustainability, site selection, and the region-wide expansion of PlatformDIGI...

The APAC data centre industry is at a critical stage. Spurred by the pandemic and the transformative effects of ongoing, widespread digitalisation from Seoul to Singapore, the region’s data centre industry finds itself on a trajectory towards unprecedented growth. According to Structure Research, APAC is now the largest data centre market in the world in terms of colocation revenue - at USD $24.1bn compared to USD $19.8bn for North America – and also the fastest-growing, with a projected CAGR of 13.7% over the next five years. The pandemic has further accelerated this growth, pushing the region to the forefront of data centre development for the foreseeable future. 

This expansion of digital services is a necessary one, as the data generated across the digital economy grows exponentially. By 2025, Gartner forecasts that there will be more than 25bn active IoT endpoints around the world, generating as much as 79 zettabytes of data every year. “The huge influx of enterprise data can lead to difficulties in moving it. Barriers brought on by data gravity will cause unfavourable complexity when considering business locations and data proximity to users,” warns Mark Fong, VP of Digital Realty’s APAC and Japan divisions. “It is important for businesses to overcome data gravity barriers that accompany digital transformation amidst global expansion efforts.”   

At the same time, the need for sustainable practice is being felt more and more keenly in a region where green design has historically lagged behind regions like Europe and North America for years. The industry needs to change and grow simultaneously and, during tumultuous and uncertain times like these, the opportunities for a company with the ability to force the advantage are virtually limitless. 

For Fong, there’s only one company capable of capitalising on this opportunity. “We want Digital Realty to become the recognised data centre leader across Asia Pacific and the only global provider dedicated to the full customer spectrum from service providers to enterprises,” he says. “We are well on our way to achieving those goals as we continue to expand our presence in key markets in the region including Australia, Hong Kong, Japan and Singapore and enter new countries like Korea.” 

A Year Like No Other

The impact of the COVID-19 pandemic on the APAC data centre industry cannot be understated. Reflecting on the last 12 months, Fong notes that, “The pandemic has caused a permanent shift in how businesses consume services. The cloud has come to the fore and this will continue driving the demand for data centre providers like Digital Realty.” In response to these seismic shifts in customer demand, Fong has seen the APAC data centre industry go “from strength to strength”, emphasising that the pandemic “has fundamentally changed the way enterprises conduct business and how people generally consume services. Businesses are now prioritising their digital strategies and building long-term resilience.”  

As digital services have become akin to an essential utility like electricity or water, Fong notes that many organisations are learning (sometimes the hard way) that an all-in public or private cloud strategy isn’t the only way to go. 

“They inevitably end up with some sort of hybrid offering and this realisation has helped us in two main ways,” he explains, noting that, not only has the shift towards hybrid cloud in APAC led to a rising awareness of the ways in which an operator like Digital Realty can support its customers’ digital journeys, but also that the past year has seen an increased shift in demand away from the 100% public cloud model towards colocation services like those offered by Digital Realty. 

A Pan-APAC Expansion

As demand and opportunity grow, Digital Realty is executing an expansion across APAC of historic proportions. The expansion involves spinning up new data centres in markets where Digital Realty already has an established presence, like Singapore, Hong Kong, Australia and Japan, as well as entering new markets like South Korea. 

“We’re excited to launch our third data centre in Singapore, Digital Loyang II (SIN12),” says Fong. “SIN12 will leverage PlatformDIGITAL® to enable global distributed workflows in the data centre to remove data gravity barriers and scale digital businesses.” 

The facility will bring another 50 MW of capacity to a market where the company already delivers 69.4 MW through its SIN10 (45 MW) and SIN11 (24.4 MW) facilities. “SIN12’s high power capacity will ensure more storage capability and host larger amounts of data. It also serves as a gateway for customers to strengthen their connection regionally and globally,” adds Fong. “We’re also expanding our customer reach covering both large scale as well as smaller enterprise customers through our product offerings.” 

In Hong Kong, Digital Realty is spinning up its second carrier-neutral data centre in the back half of 2021. Located in the urban area of Kwai Chung, HKG11 will deliver an additional 24 MW of critical IT capacity, right in the heart of Hong Kong’s rapidly developing data centre cluster. 

Also on the horizon is Digital Seoul 1, a 12 MW facility scheduled to start operating in Q4 of 2021. The project was announced at a virtual groundbreaking ceremony in June last year, and represents a vital first step into the South Korean market which, despite being one of the most digitally-developed markets in the world, has often proved a tough nut to crack for international firms. 

When selecting these sites, Fong explains that there are a number of factors that Digital Realty takes into account, from “land availability, access to power, domestic and international telecom services,” to “government stability and regulation, domestic adoption of hybrid cloud services, and international market interest.” 

It’s an interesting market to operate in, says Fong. “APAC is not a single country like the US or a union like the EU, and that poses unique challenges in having to account for vastly differing regulatory frameworks when doing business, as well as culturally different ways of buying and selling.”  

BOX OUT: Partnering for Success: Digital Realty and Newark Engineering

“Our strategic partners have played a critical role in supporting our business throughout the COVID-19 crisis. Our business relies on timely delivery of spares as a result of maintenance routines or break fix routines. Additionally, our construction program requires timely delivery of mechanical and electrical infrastructure. The pandemic has really highlighted how complex the supply chain and logistics systems are. With air freight severely impacted in early to mid-2020, our partners worked with us to provide updates on how their business continuity efforts were rolling out in support of our ongoing requirements,” says Fong. 

“Newark Engineering has been one of our key partners since our first Singapore Data Centre (SIN10), they are also currently working with us to expand the partnership into our second Hong Kong facility (HKG11).

“They are also the local distributors for a number of key pieces of cooling equipment.” 

Growing Green

“The energy consumption of data centres has gained much attention in APAC due to the extent of their carbon emissions,” says Fong. “According to a major local telco in Singapore, almost 7% of the total energy used in the country comes from data centres. That is a significantly higher percentage than the 1-2% average you see in the rest of the world.” 

If APAC is to balance astronomical growth with sweeping sustainable change, its data centre operators need to think, build and run green. Digital Realty’s approach to increasing its sustainability in APAC is firmly rooted in its efficiency commitments. 

Fong explains that the company is “Deploying better technologies to improve cooling, improving the energy utilisation of facilities and IT systems, and adopting ‘smart’ approaches and AI to identify where energy can be reduced.” He adds that, “We prioritise innovations in cooling efficiency because 35-40% of total energy consumed by data centres is used to run energy-intensive cooling equipment.” In Southeast Asia, more than 95% of data centres still use air-based cooling, a highly inefficient system from the days when facility management more or less boiled down to the mantra “keep it as cool as possible and don’t worry about the costs”. Fong explains that, for Digital Realty, “Liquid cooling technology is considered to be the preferred solution to effectively cool down heat-intensive CPUs and SSDs,” noting that modern liquid cooling systems “can reduce power consumption by 20-30% and water usage by up to 50%.”  

The Road Ahead

The coming year will be one of simultaneous, sustained growth and expansion for Digital Realty in APAC, as new data centres open across the region, leading to new opportunities for stakeholders, partners and customers alike. Looking to the months ahead, Fong and his team have lofty ambitions, and every intention of achieving them. “We aim to propel Digital Realty to become the recognised data centre leader across APAC,” he says. “We’re also aiming to seamlessly execute our expansion efforts in Hong Kong, Japan and Singapore, as well as opening our first facility in South Korea.” 

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