Q&A with Zhang Yi, Joint Venture Director, APAC, EdgeConneX
Southeast Asia has evolved into a dynamic hub for the data centre sector. A tech-savvy and youthful population is an enticing market for businesses seeking to tap into the rapidly 
growing digital economy. In addition, robust economic growth and a resilient business climate have further amplified the region’s appeal.
In this Q&A, I delve into how Indonesia, Malaysia, and the Philippines have emerged as thriving data centre hubs, capitalizing on infrastructure and governmental backing. With an unwavering commitment to digital innovation and advancement, Southeast Asia stands ready to assume a pivotal role in propelling technological progress and nurturing global-scale economic development.
Why do you think Southeast Asia is now a hotspot for data centre investments?
Southeast Asia (SEA) has emerged as a focal point for data centre investors, operators, and ecosystem players over the past five to ten years, drawing attention for several key reasons:
- Young Demographics: With nearly 10% of the global population and a notably youthful demographic composition, SEA holds a unique position in terms of potential market reach and consumer base.
- Sustained economic growth: Notably outpacing global averages, the region’s economy has exhibited remarkable resilience and expansion. Asia-Pacific GDP has grown multi-fold from $9 trillion (USD) in 2000 to a staggering $35 trillion (USD) in 2021, contributing a remarkable 37% to the global GDP. Projections suggest that by 2040, APAC’s share of world GDP will increase to around 42%. This remarkable economic buoyancy has created a conducive environment for substantial investments in digital infrastructure.
- Ongoing digital evolution: The ongoing digital evolution within SEA is a critical catalyst for the region’s appeal. Although the digital economy is still in its infancy, SEA is experiencing rapid expansion. Nations such as Indonesia, Malaysia, and the Philippines have been actively fostering business-friendly environments, streamlining regulations, and cultivating ecosystems that champion digital innovations, all of which are paving the way for an unprecedented surge in digital growth.
Malaysia is increasingly becoming a magnet for data centre investments: Why is this the case?
Malaysia’s prominence as a hub for data is the result of meticulous planning and strategic investments. Setting out on its digital transformation journey early, the nation swiftly recognised the necessity of a digital future and initiated the development of a robust infrastructure to facilitate this shift. As a culmination of these efforts, Malaysia now boasts a resilient technological foundation that adeptly caters to the burgeoning demand from across the region.
The Malaysian government has also made it easy to interact and has positioned itself as an easily accessible partner. Whether engaging with the ministries, state governments, or specific administrative levels, the authorities exhibit a solid understanding of the data centre industry and its requirements, providing ready and comprehensive support. Proactively formulating policies that foster industry growth, the government has demonstrated a keen commitment to nurturing an environment enabling this sector to thrive.
The Philippines is also on a growth trajectory when it comes to data and digitalisation, what are the attributes that make it a good environment for the industry?
With the second largest population in Southeast Asia and boasting the region’s highest average daily internet usage of four hours, the Philippines stands poised to ascend as a central digital hub. This potential is further underscored by the country’s extensive infrastructure, which includes a vast fibre optic network and a series of upcoming trans-Pacific cables connecting the Philippines to the US in the next year.
This anticipated connectivity will propel the Philippines forward in its digital growth and, with this, an uptick in the demand for digital infrastructure. As with every market, there will be challenges along the way, but this is where partnerships with local expertise can help navigate the nuances and enable faster implementation of data centre solutions.
The country’s business environment and government policies are set up and ready to play a crucial role in shaping the country’s digital future.
How is Indonesia’s data centre market shaping up?
It’s important to understand the evolving nature of data centre projects. In the past, one data centre project is usually contained within one standalone building. Today, a hyperscale data centre campus is more likely, with several tens or even hundreds of megawatts of capacity, to be built in phases over the years. The construction and supply continue despite what may seem like slower growth in comparison to Malaysia and other countries in the region.
Given Indonesia’s status as the largest country in the region in terms of population and the fourth largest globally, the sustained need for digital infrastructure remains significant. In that sense, it’s a marathon, not a sprint, and we’re planning for the long term.
With an influx of global players eyeing Southeast Asia, what sets EdgeConneX apart?
The ever-evolving digital ecosystem in SEA requires bespoke solutions specific to each market. It’s not just about establishing capacity but also ensuring that the data centres work seamlessly with the requirements of both, the country and its people. For example, our data centres in Malaysia, are strategically placed in vital locations like Kuala Lumpur’s Central Business District, Bukit Jalil, and Cyberjaya. This ensures our clients can harness the power of low latency and high-speed connectivity.
While differentiation in a diverse market like Southeast Asia is a challenge, we leverage our global expertise and partner with local insights to provide hyper-local pioneering solutions. We value the strength of our partnerships, whether it’s with governments, regional partners, or our clients, and this not only drives our success but also supports the growth of the entire SEA digital landscape.
For more information on our data centers in Indonesia, please visit: https://www.edgeconnex.com/locations/asia-pacific/jakarta/
For more information on our data centers in Malayasia, please visit: https://www.edgeconnex.com/locations/asia-pacific/kl-malaysia/
Learn about our partnership with Aboitiz in the Philippines: https://www.edgeconnex.com/company/news-and-pr/edgeconnex-and-aboitiz-infracapital-form-joint-venture-to-address-enormous-data-usage-growth-in-philippines/
