Unlocking potential: Southeast Asia’s explosive growth in the data center market
Rapid growth expected for the data center (DC) market, driven by strong underlying factors.
"Southeast Asia is experiencing a boom in DC capacity being built. The large construction volume each year and the rapidly increasing total installed base form a strong fundamental driver for third-party business models."
SEA currently lags in data center capacity relative to global averages, with only 1.8 MW per million population. While the region is experiencing rapid digitalization and cloud adoption growth, its data center infrastructure has yet to catch up with the increasing demand. However, projections show nearly threefold growth by 2027 and an additional 2100 MW capacity expected over the next four years. What does this mean for the industry?
We at Roland Berger provide insights into the Southeast Asia data center ecosystem, focusing on the value chain, service model development, and maintenance landscape, which are crucial for supporting digital infrastructure. Based on primary research and industry interviews, we represent the overall findings and focus on four main areas.
Evolving service models
The data center value chain, including construction and operational stages, has a recurring demand for non-IT technical services. These services cover design/build advisory, maintenance, engineering support for electrical and cooling components, and DCIM (Data Center Information Management) support.
DCIM support is provided by software companies, with trained personnel managing systems. The market for these services is growing rapidly due to increasing data center capacity.
Third-Party Maintenance (TPM) provider segment growing stronger
TPM service providers are gaining prominence as a segment for maintenance and build/design consulting. They can bring economies of scale, being able to maintain assets from various OEMs and vendors, as well as best practices.
Currently, all three service provider categories command roughly one-third of the market share.
Rapidly growing DC engineering services market
The market for maintenance and engineering services for data centers is driven by the growth in the underlying assets.
Two main categories are relevant – initial design and build advisory services, and ongoing maintenance services. The value pools of both services are linked to the data center capex, specifically the non-IT part.
Fragmented and competitive market
The market is fragmented and crowded with a large number of small and mid-sized players operating in specific regional niches.
Local, smaller players enjoy higher levels of trust with clients and can provide higher levels of flexibility and customization of service.
Larger players bring global best practices and expertise, and can also enjoy a stronger relationship with global or regional clients if they can serve them in multiple countries.
Conclusion
Investors and service providers must navigate a fragmented but high-growth landscape, where scalability, expertise and regulatory compliance will be key differentiators. The market is projected to expand substantially in the coming years, and those who can adapt to evolving service models and capture regional demand will be well-positioned for long-term success.
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