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Vietnam emerges as a strategic location for tech giants

06/12/2023    171

According to Statista, the amount of data created, captured, copied, and consumed worldwide is expected to grow rapidly, reaching 64.2 zettabytes by 2020. Global data creation is projected to exceed 180 zettabytes over the next five years through 2025.

As data volumes increase, competition to build data centers around the world is intensifying. Countries and tech giants are looking for strategic data center locations to stay ahead in the race. McKinsey experts identified Vietnam as such a location, prompting tech giants to continuously invest in data infrastructure.

According to Cushman & Wakefield's Asia-Pacific Data Center Report, data centers in the region are expanding rapidly, and operators are actively seeking new markets to meet the growing demand from digitalization and artificial intelligence.

Hanoi, Ho Chi Minh City, Busan (South Korea) and Taipei (China) have stood out as emerging markets that have attracted the attention of data center operators in the first half of this year, according to the report.

A strategic location for data centers

Australian company Edge Centres has expanded into Asia by partnering with Vietnam National University to build its first data center in Ho Chi Minh City. The company also plans to set up another in District 1.

GAW Capital Partners, a Hong Kong, China-based private equity real estate fund, has invested in a new data center (IDC) with an estimated area of over 18,000 square meters in the Saigon Hi-Tech Park in Ho Chi Minh City. The IDC project is expected to be completed by 2024.

Meanwhile, NTT Global Data Centers of Japan and Vietnam's Quang Dung Technology (QD.Tek) are jointly developing a new data center in Saigon Hi-Tech Park, which is expected to be launched next year.

According to the Ministry of Information and Communications, with the entry into force of Government Decree 53 on data localization for foreign enterprises, domestic technology companies are increasing investment in data centers.

However, domestic companies only hold 21% of the market share, which is split between major players such as Viettel (25%), FPT (12%), CMC (15%), VNPT (10%), VC Corp (6%), and other providers (22%).

Foreign technology companies dominate the Vietnamese market, with AWS holding the largest share (33%), followed by Google (21%) and Microsoft (21%), with other providers such as Alibaba, Digital Ocean, and Vultr holding 3%.

The data center market in Vietnam is expected to grow at a CAGR of 10.68% from 2022 to 2028, reaching $1.037 trillion, according to a report by Research and Markets.

Meanwhile, the cloud market in Vietnam is expected to reach more than $545 billion in 2022 and grow to $1.24 trillion by 2027 at a CAGR of 17.9%, according to a report from the Ministry of Information and Communications.

High-quality data centers

Building high-quality data centers is one of the key focuses of digital transformation in Vietnam, in line with the strategy to develop a digital economy and nation.

Leading technology companies in Vietnam, such as VNPT, Viettel, CMC, VNG, and FPT, have invested heavily in the construction and development of modern, large-scale data centers that meet international standards and provide world-class services.

 In Ho Chi Minh City, FPT Telecom is building a data center in the Saigon Hi-Tech Park in District 9, while CMC Telecom is preparing to launch a data center in the Tan Thuan Export Processing Zone in District 7.

Viettel IDC is expanding its data center in the southern province of Binh Duong, and Hanoi Telecom is extending its data center in Hanoi's Hoa Lac Hi-Tech Park.

VNPT has invested resources to launch its 8th data center, named VNPT IDC Hoa Lac, which was unveiled at the end of October. This is VNPT's largest and most advanced data center, ready to meet the customized needs of domestic and international customers in all segments.

Vietnam aims to become the "digital hub" of Southeast Asia, and the development of data centers is a fundamental platform for building a digital infrastructure that optimizes economic activities, according to the MIC.

Tran Minh Tuan, head of the MIC's Department of Digital Economy and Digital Society, said the ministry has submitted the revision of telecommunications laws to create a legal framework for data centers. In addition, the ministry is issuing standards and technical guidelines for data and cloud infrastructure.

He stressed that in addition to expanding data centers, Vietnam needs to focus on ensuring their efficient operation, which will contribute to advancing the digital government, digital society, and digital economy and achieving the goal of becoming a digital nation.

Source:Ha Noi Times