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New Data Centers Feed Growing Cloud Demand in Asia

Enterprises in Singapore and Malaysia are taking advantage of new service options, using clouds for cost reduction, sustainability and other goals, ISG Provider Lens report says

The markets for private and hybrid cloud services in Singapore and Malaysia continue to grow as providers increase investments in data centers across the region, according to a new research report published by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

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“For many organizations, a hybrid approach offers the ideal mix.”

The 2023 ISG Provider Lens™ Private/Hybrid Cloud — Data Center Services report for Singapore and Malaysia finds that rising enterprise demand for exceptional computing resources, especially green data centers and hyperscaler capabilities, is driving data center expansion and modernization. Companies have a growing number of managed services, managed hosting and colocation options to choose from.

“Strong investments are turning Singapore and Malaysia into world-class data center services markets,” said Ben Rossiter, principal consultant, Technology Modernization, at ISG. “We expect providers to keep expanding managed hosting capacity.”

Enterprises in the region seek data center services to meet growing needs for security, sustainability, edge computing, customization and compliance, the report says. Many are turning to services using AI, ML and automation to address challenges related to rising costs and skilled labor shortages, which are expected to persist beyond the end of the decade.

Singapore and Malaysia are separate markets, due to regulatory, geopolitical and cultural factors, but the same technologies meet typical clients’ needs in both nations, ISG says. Global providers offer on-the-ground capabilities in both markets, more so in Singapore than Malaysia. However, Malaysia is catching up thanks to steady data center investments in both Kuala Lumpur and Johore Bahru, strategically located on the border with Singapore.

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Edge computing applications are expanding in the region in asset-rich industries such as retail and utilities, though more slowly than anticipated, the report says. The use of these applications and IoT devices to reduce latency and achieve real-time data processing is creating additional demand for private and hybrid cloud resources.

Enterprises are also accelerating sustainability efforts in response to government and private-sector initiatives, especially in Singapore, ISG says. Data center strategies are often at the heart of these efforts, with companies shifting to greener locations, energy sources and management systems even faster than expected in 2022.

While public clouds are growing faster, private clouds still have utility for some enterprises due to factors such as data sovereignty, particularly in Malaysia, ISG says.

“The choice between public and private clouds depends on attitude and culture as well as technology,” said Jan Erik Aase, partner and global leader, ISG Provider Lens Research. “For many organizations, a hybrid approach offers the ideal mix.”

The report also explores other cloud trends in Singapore and Malaysia, including the need for skills development across the region and the growing popularity of data-center-in-a-box offerings.

The 2023 ISG Provider Lens™ Private/Hybrid Cloud — Data Center Services report for Singapore and Malaysia evaluates the capabilities of 35 providers across three quadrants: Managed Services, Managed Hosting and Colocation Services.

The report names Singtel and Telekom Malaysia as Leaders in all three quadrants. It names Fujitsu and Kyndryl as Leaders in two quadrants each. Accenture, DXC Technology, HCLTech, Infosys, NTT DATA, NTT GDC, Starhub, TCS, Telstra and Wipro are named as Leaders in one quadrant each.

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