Asia-Pacific Undergoing Massive Data Center Growth

There are well over 1,000 colocation data centers in the US, but the real growth hub is happening in the Asia-Pacific (APAC) region. In order to keep up with the demands, SYS-CON Media reports that APAC dishes up just over 26 percent of total energy usage consumed by data centers around the globe. However, there are issues involved with such high consumption, such as poor energy management techniques (not all data centers in this region are green) along with a complete surprise in the amount of demand. If APAC data center providers can’t keep up and don’t get their energy usage in check, a crash is bound to happen.

Even though APAC offers over 25 percent of all data center options in the world, the actual supply vs. demand is very low. Worse, the pricing options compared to the US cannot even begin to compete. In 2015, the price for colocation space is 2.75 times higher than in North America, and there is currently little that can be done about it. It takes a lot of resources and power to cool such data centers, and the call for high density blade servers in some parts of APAC just add to the price.

Geo-Targeting Concerns

Some of the most in-demand countries include India, China and Malaysia but, given the high population rates in these countries, there is not much land/space to build a decent data center. Location is critical in every country when developing and choosing a colocation data center due to security and connectivity. Simply put, data centers take up a lot of room. There needs to be intense security to safeguard against burglaries, but also the “right” location which is not prone to natural disasters. In places like Shanghai or Mumbai, such a space does not exist.

However, there are also more rural areas that are a prime spot for better, cheaper colocation data centers. Ultimately, prices in these more spacious regions are slated to go lower, but it may never be able to compete with places in North America. That being said, as clients are educated on what they deserve in a colocation provider, they will see the benefits of choosing a data center that is relatively local for a better, faster connection.

The Problem with Power

Utility prices are going up, and colocation providers are forced to pass those prices along to their clients. This has led to over a ten percent increase since 2012 alone in the APAC. There are some data centers which embrace green practices, such as solar panel powering, but that trend has yet to catch on with data centers in the APAC. As APAC colocation providers struggle to stay competitive, they are giving up some of their profits while still offering some of the highest prices around the globe.

All of these issues are leading to incredible innovation, yet many ideas are still in the initial stage. According to a recent report by Mordor Intelligence LLP, different major end users are all looking for unique things in a colocation provider. Major companies like Hewlett-Packard and Eaton want more from their data centers and providers, and—even though their budgets are quite loose—nobody wants to overpay just because a provider happens to be in a disadvantaged region.

Considerations for US Businesses

It is important to consider what is happening in the colocation industry overseas, but American businesses and website owners are in the sweet spot. Relatively speaking, data centers in the US are affordable, there are plenty of choices and with such a sprawling geographic area you are bound to find a provider nearby. Particularly for states with low rates of natural disasters, such as Utah, local businesses can even build a relationship with their provider and perhaps tour the data center. If this is feasible, it’s a great way to test out the security for yourself.

An ideal data center is about more than location and price, although those are both major concerns. Customer service should also play a critical role, as well as accessibility. If a cheap, nearby colocation provider doesn’t seem to have a clue what they’re doing or only offers banker’s hours, how is that going to suit a business during an emergency?