预计到2023年，亚太地区的GDP将会占全球的50%以上（按购买力平价计算）。《金融时报》表示，今年，亚洲的中产 [1] 将占到全球的一半。随着这些人的素质和购买力逐渐提升，他们将成为亚太地区发展的动力。

中国是亚洲经济发展的主引擎，从购买力平价角度而言，中国是相对美国而言更大的经济体。过去30年，中国经济持续稳步增长。2000年以来，中国的经济翻了一番多。2019年，中国占世界GDP的19%。有趣的是，中国的发展质量在过去10年内发生了很大变化，由过去依靠人口红利实现低成本制造，转变成技术生力军。

这不仅体现在中国广泛和成熟的产品制造和服务上，同时也体现在快速增长的技术基础设施上。在亚太地区迅速发展的互联网基础设施市场，中国的市场份额最大，发展速度最快。对此，中国政府高度重视，并在最近提出加快“新基础设施”建设²。

随后，阿里巴巴宣布了未来三年投入280亿美元的计划，腾讯也宣布未5年将在新基础设施投入700亿美元。预计到2023年亚太地区的数据中心和主机托管服务市场将会达到320亿美元的规模。届时，中国在亚太地区的整个市场将占36%，排在首位，其次是澳大利亚和日本，各占22%和8.3% [2]。

根据预测，中国的互联网数据中心（IDC）市场规模将从2018年的180亿美元增加到2020年的250亿美元 [3]. 同时，主机托管市场也将迅速发展，从2019年的21亿美元增加到2025年的69亿美元，年复合增长率高达22.12% [4]。

这种高速增长背后的原因，包括大量企业数据的生成、大小企业对数据安全和恢复的需求。除了跨国企业，还有许多本土企业也在寻求数据中心托管服务，推动了数据中心托管市场的发展。中国的数据中心市场发展迅猛，拥有两座世界级规模的数据中心，均坐落于内蒙古。一座占地1070万平方英尺、规模30亿美元，另一座占地770万平方英尺、建设成本19.2亿美元 [5]。

在数字化快速发展的过程中，电信企业主导了中国的数据中心市场，占据了50%以上的市场份额 [6]。而5G移动技术在中国的进一步应用也将极大推动数据中心和机房空间的需求。

电子竞技发展迅速
有趣的是，分析认为，电子竞技也将是中国数据中心需求的主要驱动力之一。中国国内的游戏市场规将从2018年的308亿美元增加到2023年的415亿美元 [7]。

中国已经拥有世界最大的游戏群体——玩家数量高达6亿，几乎是全国人口的一半。到2023年，这一数字还将增加到8.78亿，占全球电子游戏市场的三分之一 [6]。国外的游戏开发商进入中国市场一直困难重重，但是，Niko Partners [8] 的市场调研结果显示，中国的进口游戏行政审批流程已经有所改善。

今年3月24日，中国公布了三分月第二批获批的游戏，其中国产游戏53款，包括47款移动游戏、2款Switch主机游戏、4款电脑客户端游戏。预计2020年全年获批的游戏将在1500款左右，与2019年持平。3月下旬，盛趣游戏、腾讯游戏和腾讯云联合宣布达成战略合作，促进云游戏落地 [9]。

第5代移动通信技术（5G）延时低、带宽高的特点很可能大力助推中国的游戏行业。5G网络解决延时问题的一种方法是将直播视频移到靠近5G设备边缘的地方。这对互联网基础设施有巨大的影响，很可能推动下一代数据中心的需求。

电子竞技的龙头企业正在和数据中心运营企业合作，希望能给玩家和粉丝带来流畅的线上体验 [10]。中国的云服务商意识到这一机遇，正在争先恐后地进入电子竞技行业。

增长前景乐观
中国的5G事业和电商行业正在拔高数据中心的价值。当前，中国有超过70%的人口使用电子商务服务进行商业或非商业活动 [11]。

根据eMarketer 的报道，2019年中国电商零售规模增加了27.3%，达到了1.935万亿美元，占全国零售规模（5.291万亿美元）的36.6% [12]。电商零售的这种强劲的势头至少会保持到2023年。

在这样的增长势头下，企业纷纷加大投入。例如，阿里巴巴未来三年在云计算的投入将高达280亿美元。《金融时报》表示，作为世界最大的云服务商之一，阿里计划斥资建设下一代数据中心并研发半导体和服务器相关的技术 [13]。

中国的市场有其特殊之处。《金融时报》引用中国工信部的数据称：在中国的东北部，数据中心的供应是需求的两倍，导致机房的实际使用率较低。而在大城市，机房利用率相当高。例如，在北京和上海的数据中心供应缺口分别为20%和25% [14]。

新加坡发展银行的一份银行业报告的概要表示，数据中心服务的需求主要来自于北京、上海、广州和深圳等地。数据中心第一梯队城市的已建机房实际使用率在80%左右，这些地方的需求还将以每年20%-30%的速度递增。

PDG在2017年进入中国市场，目前正在推进的项目位于战略位置极为重要的上海和长三角地区。该地区是中国第一大数据中心市场，预计在未来十年将保持稳步增长。

PDG 在中国有6个数据中心。其中，旗舰数据中心位于上海市奉贤区，将于今年四季度建成14兆瓦，项目整体规模为40兆瓦。此外，PDG还有两个正在推进中的项目，预计于2021年初动工。其中一个位于江苏省南通市，另一个则位于江苏省的省会南京市。南京和南通项目均为大型项目，规模分别为50兆瓦和70兆瓦。目前计划在2022年交付。另外三个项目已经建成并完全投入使用，并通过合资的形式运营。

PDG在中国的重点是互联网行业和超大型企业，同时，我们也在找寻大型的内容提供商作为潜在客户。中国的互联网基础设施市场的增长没有放缓的迹象，对于企业来说，将会有大量内在和外在的增长机会。

The strategically located South-east Asian (SEA) region is home to a technology savvy population of 650 million people [1]. SEA with its geographical advantage is a vital cog in global merchandise trade and manufacturing.

Annual trade valued at US$5.3 trillion, passes through the sea lanes of SEA and an estimated 15 million bpd (barrels per day) of oil is transported via the strategic Malacca Straits [2]. As the global economy becomes more digitalized, the region’s importance has increased further as it transitions from being a merchandise trade center to becoming one of Asia’s major digital hubs.

The local market is also evolving. Powered by changes in consumer behavior, the SEA’s Internet economy has been growing at an unprecedented pace hitting US$100 billion in 2019, tripling in size over the past four years. By 2025, the Internet economy is expected to grow to US$300 billion [3].

SEA’s booming digital economy and strategic location has attracted leading global technology companies like Google, Amazon, Microsoft and Alibaba Cloud all of whom have either set up state-of-the-art Internet infrastructure in the region [4] or have announced plans to do so in the near future. As a result, SEA will have the fastest growth of colocation data centers with the market expanding at a 13 per cent compounded annual growth rate (CAGR) between 2019 and 2024, according to research by Cushman & Wakefield [5].

A large part of the surge in data center growth will be driven by the adoption of IoT (Internet of Things) solutions as companies adopt Industry 4.0 technologies [6]. IoT devices, especially in industrial settings, dramatically increase the number of connected devices which generate large amounts of data. This data is stored and analyzed in data centers to generate actionable intelligence. Manufacturing, oil and gas, and healthcare sectors are some of the major adopters of IoT in the region. As data centers consume a significant amount of energy, many companies operating in the region are opting for new innovative designs and builds of eco-friendly data centers that are more sustainable and energy efficient [7].

Singapore
As SEA’s hub, Singapore is the largest data center market in the region. Recognized as one of world’s pre-eminent entrepôts, Singapore has always been at the forefront of international trade and commerce. With data being the currency of the new digital economy, it is little wonder the Republic has evolved to become one of the most mature data center locations globally. It is seen as one of Asia’s leading market in terms of data center business operations, ahead of Hong Kong, South Korea and Japan [8].

Multimedia content providers and cloud companies are driving strong demand for data center storage and networking in Singapore. There are a growing number of younger consumers who access high levels of data daily to watch movies, upload photos and videos, play games and make cashless payments. This is attracting interest in colocation activities with various international players looking to set up data center operators in the region to support this growing demand.

Source: Structure Research, 2019

Singapore also accounts for the largest supply of Asia Pacific data centers in a single location [9], nearly all major hosting and cloud providers globally have built a presence in Singapore. The growth of the Singapore Data Center market is forecasted to exceed 25% over the five-year period, 2019 – 2024.

Indonesia
The fast-growing Indonesian internet infrastructure market is the next major driver for SEA’s data center market. With more than 170 million internet users in the country, the Indonesian government has prioritized the digital economy as an important sector for economic growth [10].

With a growing middle class, which some estimates believe accounts for more than 50 per cent of the total population, Indonesia has developed into an e-commerce hotbed in SEA. Market estimates reckon that the country’s e-commerce market was worth US$21 billion in gross market value (GMV) terms in 2019. McKinsey expects Indonesia’s e-commerce industry will increase almost four-fold, to be worth US$40 billion by 2022 [11]. As a result, the industry is seeing a lot of investment with established as well as new players shoring up their internet infrastructure in the country.

The Indonesian data center market is expected to grow at a CAGR of around 11 per cent during the period 2019-2025 [12]. According to another report [13], Indonesia added more than 20 million new social media users during 2018–2019 and out of these, more than 10 million are active mobile social media users. Around 95 per cent of mobile users watch online videos, and over 60 per cent of the population now performs banking services via smartphones, thereby increasing the demand for data center facilities in the country. Indonesia’s digital economy which was at over US$30 billion in 2019 and this is expected to grow to US$150 billion by 2025.

Amazon Web Services (AWS) has announced that it will invest US$951 million in the country over the next 10 years [14]. Earlier this year, Google confirmed that it is looking to open its first data center in Jakarta over the next twelve months [15]. Microsoft has also expressed interest in investing in a large data center in Indonesia [16].

Cloud computing giants such as Alibaba Cloud and Google Cloud Platform (GCP) have already or are in the process of establishing their cloud platforms in existing data centers in Indonesia and they seek to fast track their growth [17].

Malaysia, the Philippines & Thailand
The data center market in Malaysia has recently seen strong growth and this is likely to continue over the next few years, according to a report by Research and Markets [18]. The report notes that there has been significant new data center builds and additions to existing capacity as new providers have entered the important SEA market.

Among the other major countries in SEA, the Philippines has the most room for growth of its Internet infrastructure [19], including data centers. The Internet economy makes up 2.1 per cent of the country’s GDP currently, and is expected to hit 5.3 per cent by 2025. The Philippines is experiencing a growth surge in the online media sector, which has recorded a 42 per cent annualized growth rate since 2015. With 69 million users, the Philippines has the second highest number of internet users [20] in SEA, after Indonesia.

Thailand’s data center market has also entered a rapid growth phase due to digital transformation initiatives implemented by the government and increasing data center adoption by small, medium, and large enterprises. The government of Thailand is focusing on enhancing telecommunications and network infrastructure of the country to support hyperscale data centers and is looking for partnership with international data center vendors in this regard [21].

With its headquarters located in Singapore, Princeton Digital Group (PDG) is well positioned to take advantage of internet infrastructure growth in SEA. In 2019, PDG acquired 100% ownership of an existing data center – DCSG (previously known as IO Data Center) and also a 70% ownership of XL Axiata’s data center portfolio in Indonesia. Through a joint venture with XL Axiata, PDG’s portfolio of five data centers across Indonesia will support its strategic expansion in the local market. PDG has further committed US$100 million of growth capital to service the needs of hyperscalers, corporation and telecoms companies in Indonesia.

With a strong presence in Singapore and Indonesia, PDG is strategically positioned to expand in the near future to other growth markets across Southeast Asia.

By 2023, the Asia Pacific region is expected to account for more than 50 per cent of the global gross domestic product (GDP) when measured in purchasing power parity (PPP) terms. According to The Financial Times, this year Asia became home to half of the world’s middle class [1]. The increased sophistication and purchasing power of these people are driving growth in Asia Pacific.

China is the main growth engine of Asia and it now has a bigger economy in PPP terms than the US, accounting for 19 per cent of the world’s GDP output in 2019. China’s economy has more than doubled since 2000 and has been growing at a continuous clip over the past three decades. Interestingly, the quality of its growth has changed over the past 10 years. From being a source of cheap manufacturing due to labor arbitrage, China has transformed into a technology powerhouse.

This is reflected not only in the range and sophistication of its manufactured products and services but also in the rapid growth of its technology infrastructure. China has the largest market share and fastest growth rate in Asia Pacific’s burgeoning internet infrastructure market. This new focus has the attention of the Chinese government who has recently proposed to accelerate the construction of ‘new infrastructure’. This classification includes data centers as a priority for ‘new infrastructure’ [2]. Following that proposal, Alibaba announced a three-year investment of US$28 billion, and Tencent announced a five-year investment of US$70 billion in new infrastructure.

The Asia Pacific data center and hosting services market is expected to be worth US$32 billion by 2023, second only to the US market. Within the Asia Pacific region, China will account for the largest market share with around 36 per cent of the overall market opportunity by 2023, followed by Japan and Australia with 22 per cent and 8.3 per cent respectively [2].

China’s internet data center (IDC) market size has been estimated to be worth around US$25 billion in 2020, up from US$18 billion in 2018 [3]. The country’s data center colocation market is also booming and is projected to reach US$6.9 billion by 2025, growing at a compound annual growth rate (CAGR) of 22.12 per cent from US$2.1 billion in 2019 [4].

The growth drivers include the availability of a large amount of enterprise data, coupled with a rising concern regarding data security and recovery in large and small enterprises. Apart from the China-based big international players, the country has many local companies who are looking for data center colocation solutions. This is driving growth in the data center colocation market.

In keeping with its booming data center market, China is home to two of the world’s biggest data centers. Both located in Inner Mongolia, one is a US$3 billion, 10.7 million square foot data center and the other is a 7.7. million square foot data center built at a cost of US$1.92 billion [5].

With rapid digitalization, telecommunications companies dominate the Chinese data center market with a combined market share of over 50 per cent [6]. The ongoing induction of fifth generation mobile telephony (5G) in China is likely to result in major increase in demand for data center rack space.

eSports is booming
Interestingly, eSports is being viewed as a major driver of China’s future data center demand. China’s domestic gaming market is expected to grow from US$30.8 billion in 2018 to US$41.5 billion in 2023 [7].

The country already has the world’s largest number of gamers, at 600 million, which is almost half of the total population of the country. This number is expected to reach 878 million, or nearly a third of video games globally by 2023 [6]. China has always been a hard market to crack for non-Chinese game companies. But the regulatory approval of games imported into China has started to improve, according to market researcher Niko Partners [8].

On March 24 this year, China released the second batch of game licenses for the month which authorized 53 domestic games, including 47 mobile titles, two Switch games, and four PC games. It is likely that in 2020 the country’s regulators would approve around 1,500 games, the same as in 2019. In late March, Shengqu Games, Tencent Games and Tencent Cloud jointly announced that they will initiate a strategic collaboration to promote cloud gaming [9].

Cloud gaming made possible by the low latency and high bandwidth which fifth generation mobile telephony (5G) offers is likely to provide a major boost to China’s gaming industry. One way that 5G networks address latency issues is by moving streaming video closer to the edge of the network on 5G-enabled devices. This has huge implications for internet infrastructure and is likely to fuel demand for next-generation data centers.

Leading eSports gaming companies are partnering with data center operators to deliver the seamless online experience that both players and fans look out for [10].  Sensing the opportunity, cloud companies are racing to engage in the eSports industry in China.

Exciting growth prospects
China’s 5G push and the e-commerce sector are elevating the value of data centres. Currently, more than 70 per cent of the population in China are using e-commerce services for performing commercial and non-commercial activities [11].

In 2019, China’s retail e-commerce sales expanded 27.3 per cent to reach US$1.935 trillion, which accounted for 36.6 per cent of the total US$5.291 trillion retail sales in the country, according to eMarketer [12]. Retail e-commerce sales are expected to maintain strong growth till at least 2023.

Sensing the growth, companies like Alibaba have doubled down on cloud computing with a US$28 billion three-year investment plan. According to The Financial Times, the Chinese groups, one of the world’s top cloud services providers, plans to spend the money to build next-generation data centers and develop related technologies including semiconductors and servers [13].

The Chinese market has some interesting characteristics. In a recent report, The Financial Times, quoting China’s Ministry of Industry and Information Technology (MIIT), notes that while there are twice as many data centers in north-eastern China than required, resulting in low capacity utilization, data centers in the main cities are running at capacity; for example in Beijing and Shanghai, demand outstrips supply by 20 per cent and 25 per cent, respectively [14].

A DBS bank sector insight briefing adds that the demand for data center services are mainly from Beijing, Shanghai, Guangzhou and Shenzhen and the utilization rate is high at around 80 per cent for established data centers in top-tier data center cities and demand will continue to grow at 20-30 per cent per annum.

Princeton Digital Group (PDG) started its operations in the Chinese market in 2017 and its ongoing projects are strategically located in Shanghai and the Yangtze River Delta region which has emerged as China’s No1 data center market with sustained growth projected over the next decade.

PDG currently has six data centers in China. Its flagship data center at Fengxian district in Shanghai will have over 14MW capacity by the fourth quarter of this year and 40MW in all.  PDG has two other projects in development and it expects to initiate construction on these by early 2021. One project is in Nantong in Jiangsu province, while the other is in Nanjing which is the capital of Jiangsu province. Both projects are hyperscale facilities with capacities of more than 50MW in Nanjing and 70MW in Nantong respectively and is currently targeted to be ready for service in 2022. Three other sites are fully utilized and operated through a joint venture.

PDG’s operations in China are focused on the internet sector with hyperscale players. The company is also looking at large content firms as potential customers. With the Chinese internet infrastructure market growth showing no signs of slowing down, there are many opportunities for both organic and inorganic growth.

With three of the top five global economies [1] – China, Japan and India – Asia Pacific is home to a digitally-savvy population keenly interested in trying out new technologies. This has created increased demand for online services that are available anytime and from anywhere. Companies are scrambling to digitally transform themselves with a cloud first strategy in order to meet this demand.

As a domino effect, the internet infrastructure market has been growing steadily in the Asia Pacific region. This presents a major opportunity for data center operators with the right technology and expertise.

Apart from the three top economies, another regional driver for Asia Pacific growth and digitization is the economically well-knit ASEAN region with 650 million inhabitants. The region registered a combined GDP of US$3 trillion in 2018 [2], making the region another magnet for global investment with Singapore being the destination of choice for global organizations for regional headquarters and infrastructure.  The ASEAN region could add nearly as much to the global output as the Eurozone over the next five years [3], according to an HSBC report released late last year.

Adding to the already prevalent digital momentum, the COVID-19 pandemic has given a new sense of urgency for secure cloud-based digital platforms for employees to work from home during nationwide lockdowns. Many innovative cloud-based technologies are being tried out by organizations in Asia Pacific and these could become the norm once this pandemic is behind us.

Market size
To understand just how big an opportunity Asia Pacific presents for data center operators, one needs to look at market size. The region will become the second largest data center and hosting market in the world by 2023 [4] and revenues will increase dramatically. Asia Pacific will account for 29.6 per cent of the global data center market revenue in 2023, just behind North America which will account for 34.3 per cent.

In US dollar terms, the Asia Pacific data center market is forecast to reach US$32 billion by 2023, behind only North America in terms of regional revenue [5]. This represents a major growth opportunity for companies with the right technology and expertise in the internet infrastructure business.

The Asia Cloud Computing Association (ACCA), which brings out the authoritative, Cloud Readiness Index, notes that Asia Pacific’s international connectivity has increased by 63 per cent year-on-year in 2018 [6], ensuring that the region’s economies are in a strong position to lead the next wave of global digital innovation. Many governments continue to provide support around cloud infrastructure, planning and procurement, in the form of “Cloud First” strategies. All this fuels the region’s data center market growth.

Growth drivers
There are many drivers for Asia Pacific data center growth and one of them is online shopping. With the largest number of internet users in the world, online retail is booming in Asia Pacific. It is expected to grow from a paltry 3.2 per cent of total retail sales in 2011 to 17.2 per cent by 2021, according to Euromonitor International. This compares well with the global figure of 18.1 per cent also in 2021 [7].

Closely related to the above is the rise of regional super-apps, like Grab and Gojek in South-East Asia (SEA) and Paytm in India. Following the Chinese model, popularized by WeChat and Alipay, these applications offer a multitude of services to customers. Grab and Gojek offer services ranging from ride hailing, food delivery, medical advice and even help in choosing financial products. In markets like Indonesia, where the majority of the population are unbanked, the super-apps have come up with novel ways to tap into new customer needs [8].

With integration of third party services these super-apps require massive amounts of cloud compute to offer real time access through mobile phones. Not surprisingly this is also fueling regional data center demand.

Demand for OTT (Over the Top) video services like Netflix, Amazon and also regional content from a number of local service providers is also growing rapidly in the Asia Pacific region. Global hyperscale operators are thus looking for data center space in the region to feed this demand. Apart from the established players, new international services are entering the market hoping to capitalize on the enormous scale available. It is estimated that Asia Pacific subscription OTT revenues are likely to reach US$19.9 billion by 2024 [9].

Another driver for data center growth stems from the increasing requirement of governments for data localization from international service providers. A good example of this is the Indian market.

Currently around 70 per cent of the country’s data is stored outside of India but new legislation is attempting to reverse that with data localization laws that are similar to the ones being used in Germany and Australia [10]. Demand is outstripping supply in India and analysts expect the country’s data center market size and capacity to grow from 252 MW of power in 2019 to 536.1 MW by 2024, which means a compound annual growth rate (CAGR) greater than 20 per cent [11].

Indonesia is another country which is tightening legislation in order to make it imperative to store its citizens’ data within the country [12]. At the same time, the country is attracting investments from hyperscale cloud services providers such as Google, Alibaba and Amazon due to market size.

New technologies like Internet of Things (IoT), Artificial Intelligence (AI) and big data analytics, which Asia Pacific companies are rapidly adopting, require high performance computing infrastructure. Along with the fifth generation mobile telephony (5G) this will also drive cloud-based digital transformation.

For organizations, data centers are becoming as important a part of business operations as are office space, retail and industrial assets. In an increasingly digital world a cloud-based enterprise IT strategy has become an essential part of business delivery.

All these market trends indicate that Asia Pacific demand for high tech and high performance data centers is unlikely to abate anytime soon. Once the region and the globe manages to defeat the COVID-19 virus and go back to normal conditions, it is quite likely that new ways of working through online tools will become the norm and this in turn will also fuel further data center demand. This makes the region a major market opportunity for companies with the right kind of technology.

About Princeton Digital Group
Princeton Digital Group (PDG) is a Warburg Pincus-backed investor, developer and operator of internet infrastructure. Our portfolio of data centers powers the expansion of hyperscalers and enterprises in the world’s fastest-growing digital economies. Our agility, speed and unmatched experience in scaling global internet infrastructure provide our partners and customers immediate access to growth opportunities across Asia.