September 25-26, 2024 The Wynn Las Vegas, NV More information

Q3 2023: APAC Infrastructure Quarterly Report

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Executive Summary

The infrastructure services market in APAC showed more forward progress in the recent quarter amid challenges coming from the macroeconomic environment, regulatory issues and geopolitical dynamics. The Chinese clouds continue to struggle and this has had a corresponding impact on hyperscale data centre demand across the region. There are some notable regional differences. Southeast Asia remains healthy and the region is expanding steadily, while markets like Australia, South Korea and Japan continue to perform well. China, on the other hand, has struggled coming out of the pandemic and continues to face geopolitical constraints.

Self-build activity presents a new set of challenges for the region. AWS has been aggressively building its own data centres, but has opted for colocation to house its growing number of edge nodes in APAC. But the reality is that the self-build landscape remains fluid and is constantly in motion. Hyperscalers have tried to self-build, but come up against issues and opted to use colocation. The landscape in some of the region’s emerging markets can be difficult to navigate and data centre colocation operators have done the hard work and can fill gaps when the hyperscalers encounter problems that put their timelines in jeopardy. Time-to-market remains a critical factor, especially in emerging markets.

While challenges exist, the sector remains on solid footing. AI demand is on the horizon, but the edge-hyperscale segment has risen to prominence quickly as webscale providers descend on the region and hyperscale platforms try to get closer to end users in the very dense populations that are characteristic of the region’s major metros. Along with emerging platforms like ByteDance, and regional services and content providers, there is no shortage of demand to add to the pipeline and offset some of what is going on with self-builds. And there are of course, new locations that are set to take off. Edge locations in established markets are gaining momentum and new markets in the region’s second tier are growing and set to become hyperscale locations sooner than later.

This report takes a closer look at the most noteworthy themes and developments that took place in the infrastructure services market in 3Q23. It is a regional supplement to Structure Research’s other quarterly update reports.