Colocation providers in Singapore have had a good year as the country’s stature as a tech hub grew.
A study by Structure Research found that the colocation data centre market in the Asian city-state generated S$1.3 billion (approx. £720 million) this year.
It also expects to see continued growth leading to the market being ultimately worth S$2 billion by 2021.
Those in charge of businesses across the world continue to see Singapore as a go-to destination, in part thanks to its strong network infrastructure and connectivity options. Most important, however, is the business-friendly environment that has led to it becoming a hub for commercial and financial activities.
As such, many international organisations are choosing to set up regional hubs in the country, which has led to the explosion of colocation data centres.
Speaking to ChannelNewsAsia, Jabez Tan, Structure Research’s research director, said: “Singapore stands out given the proactive, friendly and highly efficient business environment compared to other APAC markets, including the ability to relatively easily obtain land to build from the Singapore government.”
“Singapore also represents a strategic Asia-Pacific hub for the cloud providers where it makes sense to build their own data centres given the low risk and long-term viability of the country as a financial and global hub,” he added.
A total of 46 colo providers are set up in Singapore, selling space in 58 facilities. Equinix and Singtel top the list of providers in the country, with a combined revenue market share of 46%. Other well-known names like Digital Realty and ST Telemedia also have a strong presence in Singapore.
Though colocation providers are doing well in the country, hyperscale cloud providers like AWS, Microsoft and Google are choosing to build their own data centres rather than using colocation facilities, something which is not happening elsewhere in the Asia-Pacific region.
The report also finds that companies looking to pursue growth in China are often opting to use Singapore as a ‘launch-pad’ for this strategy.
Despite a strong year and expectations that that trend will continue, the report’s authors do state that growth will eventually slow, given that the market has matured and is closer to saturation.