How Singapore became Asia’s data centre hub

• City-state managed this transformation within a decade
• Singapore to continue to benefit from the Hub and Spoke model

SINGAPORE is pretty much the ‘hub’ for anything in Asia these days, having taken advantage of its geographical position – smack dab in the middle between East and West – to become a centre for aviation and travel, financial services, and other industries.
 
Add data centres to that impressive list.
 
However, that was not always the case, according to DatacenterDynamics (DCD) chief executive officer George Rockett.
 
“When we first did an event in Singapore nearly a decade ago, it was a nascent market – there were a few institutions here, but there wasn’t a lot else going on,” he said in his opening keynote at Singapore Data Centre Week 2015 that kicked off Sept 14.
 
Singapore’s growth into a hub can be credited to government initiatives, according to Aaron Rasmussen, director of DCaaS (Datacentre-as-a-Service) operations at IO.
 
“The Government does a very good job at providing initiatives for multiple data centres to come in and thrive,” Rasmussen told Digital News Asia (DNA) in an interview prior to Rockett’s keynote address.
 
It also helps that Singapore occupies a key geographical location within Asia, both Rasmussen and Rockett argued.
 
“We see today that Singapore is in a very central position for a very large market twice the size of the United States – 600 million people – getting to grips with technology,” Rockett said, referring to South-East Asia.
 
“We have the benefit of a key strategic geographic location with world-leading connectivity, and a low risk of natural disasters,” Rasmussen (pic) said.
 
These factors are what other data centre operators see as vital to their operations.
 
The Lion City currently enjoys top billing in the data centre market in Asia, according to Omer Wilson, Asia Pacific marketing director at Digital Realty.
 
“Over 50% of the data centres in Asia are here – it is a vast market for data centres,” he said.
 
Challenges ahead
 
Singapore, in scaling up to become a data centre hub, has benefited from the ‘Hub and Spoke’ model of data management. This model allows the database to reside within the country of the company using the database, while utilising the computing power of a data centre hub to run the application.
 
But legislation may throw a spanner into this, with Indonesia, for example, implementing a data sovereignty law that requires data centres and backup sites to remain within the country.
 
Despite this development, the Hub and Spoke model is unlikely to go away any time soon.
 
“So many people are moving to a cloud environment, and the IT folks who have to support this have to follow a strict regimen of where the data is stored – and it will have to be centralised within key locations,” Rasmussen said.
 
Meanwhile, Equinix’s South Asia managing director Clement Goh told DNA, “You need economies of scale and low latency to run a data centre – the application itself can sit anywhere.
 
“What some service providers do is put the server farms in a hub, while putting the database out in individual countries,” he added.
 
Meanwhile, Zeena Saleem, market director for IO in Singapore, believes that other countries in the region can take advantage of Singapore’s position as a data centre hub, rather than challenging it.
 
“For example, for Chinese companies expanding into Asia, Singapore is an ideal place for them to set up their data centres,” she told DNA.
 
Demand for data centres in Singapore is unlikely to slow down, according to Zeena (pic), with many companies choosing the island-republic as a location for a primary or secondary data centre.
 
This will be also be driven by trends such as mobility, the Internet of Things, and the digitalisation of business, some of which are being driven by the Government in Singapore.
 
“Singapore is leading the world in its initiatives for the development of smart cities and the Smart Nation [initiative],” said IO’s Rasmussen.
 
“This will continue to drive the companies that support that, and data centres will be on the front edge for years to come with the Smart Nation,” he added, referring to the national vision to empower people via technology.
 
Meanwhile, Equinix’s Goh and others will discuss these issues and more at Data Centre Week 2015, being held in Singapore from Sept 14-17. DNA is an official media partner.
 
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