SINGAPORE--Asian data centers are poised to increase their market footprints and service revenues by 2010, a new study has found.
According to a report by U.K.-based consultancy BroadGroup, data centers in Asia are expected to increase their floor space by 45 percent and enjoy an 80 percent increase in service revenues by 2010. India will also emerge to become a significant player, second only to Japan.
The report is the first study for some years that assesses the structure, process of change and future prospects of the Asian data center market, according to BroadGroup.
Across the 11 economies surveyed, data center markets in the region are more complex and multi-faceted than those in other parts of the world, the consulting firm said. The study polled data centers, telcos, and organizations supplying products and services to the data center sector.
BroadGroup noted that the period up to 2010 will be marked by consolidation, significant shifts in demand, and the emergence of India where there are already substantial programs for new data centers to be built. Indian players will also be involved in the investments of Asian companies during the market consolidation.
The report also noted a shift in business models. While most data centers are focused on providing space and connectivity, some market players have begun developing a broader service offering that include managed services, BroadGroup said.
However, the shift toward offering full-fledge managed services is still not pervasive across the majority of data centers in the region. Enterprises have yet to outsource IT to third-party service providers, but may be inclined to do so once the level of customization that managed services offer becomes more widely available, BroadGroup noted.
Other trends emerging in the industry include early internationalization of relatively small data center businesses, the sustained dominance of telco data centers in many markets, and the evidence of enterprises building their own data centers to gain better control of security, operations and costs.
The report, however, warned that further investment is necessary by data centers to upgrade facilities and reduce costs, if they are keen on tapping new business opportunities.
For example, to compete effectively in new content-driven markets such as "triple play" services, data centers need to invest in equipment, people and software. They also have to address the increasing customer demand for more efficient power and cooling capabilities, redundancy and high-availability requirements.
Mock Pak Lum, CEO of 1-Net Singapore, a local data center service provider, concurred that infrastructure upgrades is a must. He told ZDNet Asia that older equipment can no longer handle the power consumption of blade servers, as well as the surge in digital media content hosted at data centers today.
However, BroadGroup noted that few data center providers are able or willing to make this investment, and suggested a need for consolidation within the industry.
William Woo, Asia leader for service delivery at global outsourcer EDS, said providers need to continue to enhance their offerings in order to meet their clients' business critical needs.
Woo said: "[Market] consolidation may be only one of the ways to meet today's data centre needs. In addition, we see that there is an increased demand for power and cooling, redundancy and high-availability requirements, because of [the use of] new blade servers and virtual machine technologies."
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