GlobalData forecasts major APAC data center growth by 2023

Asia Pacific is set to become the second largest data center and hosting market by 2023, as strong growth boosts revenue and creates new opportunities for the data center sector.

That's according to new statistics from GlobalData, which says the entire Asia Pacific data center and hosting services market could reach US$32 billion by 2023, second only to the United States market.

In 2023, North America will account for 34.3% market revenue, while Asia Pacific will account for 29.6%, followed by Western Europe (23.8%), Central and Latin America (5%), Central and Eastern Europe (3.7%), and Middle East and Africa (3.5%).

"The data center and hosting market growth in APAC will be driven by growing demand for cloud services and digitization from both enterprises as well as the investors," comments GlobalData lead ICT analyst Sunil Kumar Verma.

"The APAC region provides the leading vendors with unique benefits in terms of costs, continuous investment in connectivity infrastructure upgrades and capability to serve broader set of customer requirements in their pursuit for digital transformation.

Within Asia Pacific in 2023, China will be the largest market accounting for about 36% of the overall market opportunity, followed by Japan and Australia with 22% and 8.3%, respectively.

The region is expected to witness increased interest from the leading vendors to leverage the existing opportunity in the region. For instance, in early 2019, Chayora opened first of its planned nine data centers in China, whereas Alibaba opened its second data center in Japan and Indonesia.

Amazon Web Services launched Asia Pacific (Hong Kong) data center region in April 2019. Hyperscale data center provider AirTrunk opened its second data center at Sydney in November 2019.

"Investment will continue in new datacenter projects by existing and new entrants with a view to expand their presence in the region and serve additional customers," says Sunil Kumar Verma.

"Additionally, with the commercial availability of 5G services in the next 1-2 years, data consumption is expected to grow multiple-folds. This will result in constant connectivity requirements as well as data center supported features, for supporting the critical business applications and activities of the enterprises.

GlobalData's information is based on its Market Opportunity Forecasts Model. The model provides revenue opportunity forecasts for 15 IT solutions for the period 2019-2023, spanning 17 technology segments, 37 geographical markets, six regions, 22 verticals and two size bands.

The report was also built using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis conducted by GlobalData's team of industry experts.