Equinix opens two data centers in Malaysia with US$140 mil invested to date

• Lots of lessons learnt by Malaysian service companies in building of the two facilities
• JH1 in Johor offers clear cost advantages for Singapore firms looking to offload workloads

Equinix, a Nasdaq listed digital infrastructure company, has opened two data centers in Malaysia, one in the southern state of Johor (JH1) and the central region state of Selangor, with the facility called Kuala Lumpur (KL1). These carrier-neutral International Business Exchange (IBX) facilities establish a digital infrastructure backbone within Malaysia, providing local businesses with access to Equinix's global ecosystem of over 10,000 companies across 260 data centers in 71 major cities. 

"We firmly believe that the opening of JH1 and KL1 signals a new era of digital connectivity and innovation in Malaysia," said Cheam Tat Inn (pic), Managing Director of Equinix Malaysia. "By providing businesses with unparalleled access to global networks and cutting-edge technology, Equinix is poised to revolutionize the digital landscape."  Cheam was speaking to journalists during a media tour at JH1 on Mon, 27 May.

The US$40 million (RM188.25 million) JH1 facility, which was announced in Nov 2022, is located 15km from Singapore in Nusajaya Tech Park and offers up to 500 cabinets and 1,800 square meters of colocation space. The US$100 million (RM470.6 million) KL1 data center in Cyberjaya is expected to provide 900 cabinets and 2,630 square meters of space when fully built out. Both sites bring robust interconnection and digital services like Equinix Fabric, Cloud Router, and Internet Exchange to Malaysia, said Equinix.

While Equinix did not share pricing for its two multi-tenant sites, also called retail colocation, a property consultant familiar with pricing in the Malaysian market said the market price ranged from US$106.3 to US$117 (RM500 to RM550) per kilowatt per month. 

[RM1 = US$0.212]

The JH1 facility's proximity to Singapore will enable the "offloading of workloads" according to Cheam, as Singapore firms with growing digital needs can seamlessly expand into the new data center a short hop across the border. Malaysian companies can also leverage the site as an interconnection hub to establish digital presences across the globe by tapping into Equinix's global reach across 71 cities.

Though Cheam did not mention it, the JH1 facility is expected to offer Singapore based companies a clear cost advantage should they move workloads to JH1, with a market study by Statista.com (chart) in July 2020 showing Singapore data centers charging retail colocation rates of between US$230 to US$280 (RM1,032 to RM1,318) per kilowatt. 

While JH1 is expected to attract customers from Singapore, KL1 is expected to serve as a regional hub for multinationals looking to service ASEAN markets from Malaysia. Already, Malaysian telcos like TIME and Maxis are leveraging Equinix's Malaysian footprint, alongside firms spanning fintech, gaming, AI, and content provision.

Addressing the inevitable impact of AI on the business, Cheam said, "The deployment of AI use cases is clearly increasing at a rapid rate." AI’s hunger for high interconnectivity also means that, "They [customers] are not just coming in and doing generic AI - their AI use cases span financial modeling and different industries.”

In response to increasing AI workloads and Malaysia's rising attractiveness as a data centre hub, Google announced on 32 May that is it addressing local demand for investing US$2 billion (RM9.4 billion) to establish its first data center in Malaysia at Elmina Business Park, Sungai Buloh, Selangor, making Malaysia the second Google Cloud region after Singapore.

[Ed: Para added to update article.]

In a nod to rising concerns about the environmental impact of the mushrooming data centers and cognisant of Malaysia's stated sustainability goals, both JH1 and KL1 are 100% covered by renewable energy as part of Equinix's sustainability drive, encapsulated in its Climate Neutral by 2030 target. The facilities also incorporate energy-efficient design aligned with standards to optimize Power Usage Effectiveness.

Cheam also addressed the talent issue, not from a technology point in operating the data centers but in the construction of the highly sophisticated facilities, with the United States already experiencing such a talent shortage that is causing delays in data center construction. Pointing out that developing such cutting-edge data center facilities requires close collaboration to build local expertise, Cheam said, "A lot of learnings went on, especially for Malaysian companies and construction firms. It's not just about skills for operating the data centers, but helping architects, construction teams, and others understand data center design and building processes."

To further nurture the data center talent pipeline, Equinix, with over 30 Malaysian staff at JH1 and KL1, said it plans on partnering with government agencies like MDEC, MIDA, and MITI on developing training programs. None are in place yet.

As for further expansion, Cheam said, "The immediate thing is to continue growing JH1 and KL1. The next is bringing our full portfolio of digital services. We're seeing strong demand for our data center services. Depending on customer demand, we will be exploring new opportunities - just as we've strategically expanded in markets over 25 years to address digital infrastructure growth."