There is no questioning the growing demand for data centers and cloud services around the world, as our reliance on cloud services and IT shows no sign of slacking off. As we start off in 2017, what is the data center scene like in Singapore, a city state widely acknowledged as a data center hub in the region?
Bustling data center scene
For sure, the Singapore data center market is set for continued growth with a bumper crop of new data centers opening for business last year and this year. Executives that DCD reached out to all agreed that supply is healthy, though they offered varying perspectives of the situation.
“Singapore has been experiencing [an] under supply of quality built Data Centers over the past couple of years, especially so in the west,” said Asher Ling, COO of Kingsland Data Center, referring to a new cluster of data centers in the west of Singapore where namely Kingsland opened in 2015, and both Telin Singapore’s Telin-3 and Singtel’s DC West opened late in 2016.
”The opening of new data centers recently is really supply catching up with anticipated demand, and although it does create increased competition within the wholesale and retail colocation market, each operator does offer their own differentiated service and solution thus allowing potential clients a very wide option of quality choice,” he said.
Chris Street, the Singapore group general manager at ST Telemedia Global Data Centres is similarly optimistic, though he cautioned that the highly competitive landscape means that some players will inevitably find it hard going.
“The [Singapore] market has developed a healthy balance of local and regional players, while also attracting the global operators. This competitive landscape isn’t going to change dramatically and there will continue to be additional suppliers entering the market as the growth of cloud and service providers develops in the near term,” he noted.
“Like in any healthy market, it will evolve in such a way that some participants will not be able to thrive,” Street said. “The key thing for the operators will be to focus on the customers’ requirements and deliver a quality service.”
Yet there may be some storm clouds on the horizon. Speaking on condition of anonymity, an executive expressed frustration at customers’ indecision. A recent tender from a large organization explicitly outlined various technical requirements, including Tier III and Tier IV accreditation; but it turned out that practically all comers were considered, regardless of whether their facilities met the criterion or not. This could stem from the customer not knowing what they want, or not recognizing the qualitative capabilities offered by different facilities. Either way, this situation could negate attempts at differentiation.
As it is, intensive competition could also culminate in an industry shakeup. For instance, Bloomberg recently carried a report that Mediacorp is considering divesting of its 1-Net data center unit, including its flagship 1-Net North data center that went live in 2016. While no decision has been made, this suggests that a period of consolidation may be in the making. 1-Net declined to comment for this story.
How to build a data center hub
Still, there is no denying that Singapore has hit upon the right formula to position itself as a leading digital hub in the region. And at least one executive thinks the credit should go to the strong push by both the public and private sectors.
“Singapore has developed into a very successful data center market based upon its position as a connectivity hub and through the tireless efforts of creative individuals in both the public and private sectors,” said Street.
“From a connectivity point of view, Singapore is still well suited as a hub for the greater ASEAN region, while also being a connector between Europe, Asia, Africa and Australia. That is evidenced by the multiple submarine cables that terminate and pass through the country,” he said.
The data center industry is moving up the cloud value chain. It can be difficult to source staff with the necessary ICT or technical background
Glen Duncan, IDC
Street pointed to the ample support from Singapore’s public sector in putting together both programs that target the data center market and policies that support the growth and development of the market.
Physical data centers aside, the cloud (which runs on physical data centers) appears to be accelerating, too. Google is due to launch its second data center here by mid-2017, while both Amazon Web Services (AWS) and Alibaba Cloud each operate two distinct cloud zones here.
And there is certainly no shortage of land to establish new data centers either. The Singapore Data Center Park (DCP) is finally live with the launch of Telin-3 last year, and it still has space for as many as seven more data centers. With two power substations that are dedicated to the DCP and an internal dark fiber ring already built, this cuts the work out for establishing new facilities within the park.
But what of manpower, the traditional bane during periods of high growth? The head of a large data center operator in Singapore, speaking to DCD on condition of anonymity, was candid about a manpower crunch given the number of new data centers launched in 2016 and upcoming ones poised to go live in 2017.
While larger players have the luxury of playing the long game by training their own engineers from scratch, he noted that this is a strategy that smaller operators may not be able to match.
“When you have a lot of new players, of course they pay a premium to get your experienced data center staffers over. They get the people from local telecommunication operators and data center operators, by paying a premium of 20-30% [above the market rates],” he said.
“Yes, currently there aren’t enough specialists or skilled talents with the required mix of skills. The challenge, I see, is in the current impression people have regarding data center operations – that one has to work long hours or work in shifts,” said Freddi Huang, the head of engineering and operations at Telin Singapore.
Huang appealed for special provisions to address the manpower situation. He suggested: “The restriction and tighter labor laws to maintain the ratio between local and foreign talents makes it even more difficult to get the right talents, as locals are shying away from work in data centers. Perhaps this calls for a slight tweak in Singapore’s manpower policy by looking into the matter on a case-by-case basis.”
Glen Duncan, the senior research manager for infrastructure in the Asia Pacific at IDC agreed that data center operators in the region are facing human resource pressures, though he attributed it partly to the increasing sophistication of the industry.
“Data centers are not so much about the facilities and operations anymore. They are about what goes on inside them, the cloud ecosystem. The data center industry is changing, moving up the cloud value chain. It can be difficult to source staff with the necessary ICT or technical background or understanding for this journey,” he said.
On the plus side, Duncan thinks that developments such as automation can be a force multiplier, and that Singapore has what it takes to make the challenges more manageable. Duncan noted: “Datacenters are a capital-intensive business with significant operating costs. The human resources component is also critical. However, Datacenter Information/Infrastructure Management (DCIM) software is common allowing for the digital management and early identification of many problems.”
“In Singapore, the industry is quite mature with many local and global data centers and providers in action. Many of the new builds are the second or third facility for a provider so critical available resources can be moved around to points of need. Similarly, many new data centers are from global operators who can move resources worldwide,” he said.
Featuring its new theme DCD>Zettastructure, the 11th DCD event in Singapore will take place from 20 to 21 September 2017, gathering over 1,500 senior industry professionals to grow in knowledge and skills. This Southeast Asian Digital Infrastructure Summit will convene the whole IT ecosystem in the era of Big Data and accelerated innovations. Find out more about it here.
DCD’s regional events, DCD>Thailand and DCD>Indonesia, will take place over the next three months and end-users can register for their free passes now. Visit www.dcdconverged.com for the full calendar of events.