Hyper­scale data centres on track as Big Techs move in

This trans­lates to around 95MW per year on av­er­age although this ta­pers off slightly to just 58MW an­nu­ally with­out the Face­book devel­op­ment.

Singapore Business Review - - ANALYSIS: DATA CENTRES -

Over 2015-2018, an av­er­age of 35MW of sup­ply was added to the data cen­tre mar­ket per an­num in Sin­ga­pore, ac­cord­ing to a re­port by CGS-CIMB. The av­er­age sup­ply for 2019-2022F is ex­pected to be about 50MW per year.

CGS-CIMB an­a­lyst Lock Mun Yee and Ervin Seow said that they ex­pect over 380MW of new data cen­tre ca­pac­ity to come on­stream over 20192022F, which trans­lates to around 95MW per year on av­er­age.

Larger de­vel­op­ments in Sin­ga­pore are sites owned by end-users such as Google and Face­book, whilst the rest ap­pear to be data centres in the colo­ca­tion space. “The 150MW data cen­tre at Tan­jong Kling will be Face­book’s first data cen­tre in the re­gion. Face­book does not have a sub­stan­tial cloud busi­ness like Ama­zon and Google and so we do not ex­pect its new data cen­tre to dis­place de­mand from other colo­ca­tion providers like Kep­pel DC REIT,” they said.

With­out the Face­book devel­op­ment, av­er­age in­com­ing sup­ply would be ap­prox­i­mately 58MW per year over 2019-2022F.

Google has his­tor­i­cally built and owned its data centres due to a size­able cash balance on its books.

Ac­cord­ing to the Cisco Global Cloud In­dex, data stored in data centres is ex­pected to grow at a

34% com­pound an­nual growth rate (CAGR) to reach 1.3 zetabytes by 2021F. Much of this data mi­gra­tion to­wards data cen­tre stor­age can be at­trib­uted to the rapid adop­tion of cloud com­put­ing ser­vices.

This trend is also cor­rob­o­rated by data from Syn­ergy Re­search show­ing that hyper­scale operator capex has been catch­ing up with tel­cos, which were tra­di­tion­ally the largest users of data centres. In 2018, the ag­gre­gate capex of the top 5 hyper­scale spenders, com­pris­ing Google, Ama­zon, Mi­crosoft, Face­book and Ap­ple, was al­most iden­ti­cal to the capex of the top 5 telco spenders China Mo­bile, AT&T, Ver­i­zon, NTT and Deutsche Telekom.

“Within the cloud ser­vice providers, we note that large scale providers have gained mar­ket share over the past four quar­ters at the ex­pense of small and medium-sized cloud op­er­a­tors, who have col­lec­tively lost 5% pts of mar­ket share over the same pe­riod,” Lock and Seow said.

As the use of pub­lic cloud be­comes in­creas­ingly preva­lent, the an­a­lysts also ex­pect a shift in data cen­tre de­mand from the colo­ca­tion space of in­di­vid­ual cor­po­rates to the cloud space of cloud ser­vice providers.

Ac­cord­ing to re­search from Broad­group Con­sult­ing cited by CIMB, de­mand for data cen­tre fa­cil­i­ties is ex­pected to fol­low global trends and be driven by large hyper­scale providers which could potentiall­y take up around 40% of Sin­ga­pore’s colo­ca­tion space. “It ex­pects the bulk of the re­main­ing

60% space to be taken up by tel­cos, multi­na­tional or­gan­i­sa­tions, and bank­ing and fin­tech ser­vices com­pa­nies,” the an­a­lysts noted.

“As hyper­scale providers in­creas­ingly take up greater space, we think that other data cen­tre ten­ants could face a sup­ply crunch for large space and this also could push rents up,” Lock and Seow said, with CIMB not­ing that Broad­group ex­pects new de­mand to av­er­age ap­prox­i­mately 50MW per an­num in Sin­ga­pore.

Data stored in data centres is ex­pected to grow at a 34% com­pound an­nual growth rate to reach 1.3 zetabytes by 2021.

The 150MW data cen­tre at Tan­jong Kling will be Face­book’s first data cen­tre in the re­gion

Data cen­tre sup­ply and de­mand trends (2015-2022)

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