Room remains for data centre development

Viettel is looking to attain 17,000 data centre racks by 2025, at a cost of $415 million, Photo: Shutterstock

At the Vietnam Real Estate Symposium co-organised by Knight Frank and the Australian Chamber of Commerce, Fred Fitzalan Howard, Knight Frank’s Asia-Pacific Data Centre Lead, said the country as it stands is unlikely to have the data centre capacity to meet the potential requirements and ramifications that a 2022 decree implies.

Decree No.53/2022/ND-CP, in force for a year, requires companies storing Vietnamese data to host that data in the nation, with the sweeping reforms expected to drive demand for data centres nationwide. But as it stands, Vietnam only has fewer than 30 operational data centres.

“Vietnam’s large population and digital service requirements – there are 100 million people on their smartphones generating new data constantly – ensures prolonged future demand from people here, and the emergence of AI is a significant accelerator of this,” Howard said.

Howard also talked of “hyperscaler” companies such as Microsoft, Google, and Amazon – the latter of which visited Vietnam in March to announce its interest in data centres here.

“There remains a degree of uncertainty around leasing in the sector,” Howard explained. “Cloud service providers are currently taking a cautious approach and delay their market entry to ensure that suitable data centre capacity is constructed.”

A report released in June by the Authority of Telecommunications under the Ministry of Information and Communications said that Vietnam’s data centre sector is trailing behind the growth in demand.

Among the 27 centres currently operational, 46 per cent are based in the south, 35 per cent in the north, and the remainder in the central region. The cloud computing market share is currently mainly in the hands of foreign businesses, while Vietnamese businesses only account for about one-fifth of the market.

Currently, there are many technology and telecommunications investors from the Americas, India, Hong Kong, and Japan who want to rent land or buildings to develop international-standard data centres, with an area of 10,000-30,000sq.m around big cities such as Hanoi, Ho Chi Minh City, and Danang.

Among those are the Hong Kong’s Gaw Capital with a 18,000sq.m data centre and IT capacity of 20MW in Saigon Hi-Tech Park, which is set to be operated in 2024.

During Amazon’s visit in March, it announced it would build 10 local data centres in Australia, India, New Zealand, Philippines, Thailand, and Vietnam in the coming years.

Domestic tech enterprises such as Viettel have also planned to invest. Viettel wishes to pump an additional $415 million into Viettel Cloud to expand its scale to 17,000 racks by 2025.

The Viettel Cloud ecosystem has the largest data centre infrastructure system in Vietnam with 13 centres, more than 9,000 racks, and over 60,000sq.m of floor space.

At the Data Centre and Cloud Infrastructure Forum held in June, Hoang Van Ngoc, director of Viettel IDC, shared that Vietnam is still behind other countries in the region in terms of scale, floor area, and electricity consumption.

“Not only that, Vietnam’s data centres are mainly dispersed among customers, organisations, businesses, and even state agencies. This will create different models to protect all information and all data,” Ngoc said.

Decree 53 requires both international and foreign companies to store personal information on Vietnamese users, the data that they generate, and data on their relationships in various specified ‘captured sectors’, which include social media, e-commerce, and online gaming for a minimum of 24 months.

Data centre appeal poised to expand Vietnam’s data centre sector is poised for substantial growth, although challenges surrounding regulations, construction, and mounting demand for energy efficiency need to be effectively navigated.

Indonesia plans to build various national data centres The Ministry of Communication and Informatics of Indonesia is aiming to complete and inaugurate a national data centre in Bekasi district, West Java province, by October 2024.

Prospects bright for data centre and cloud infrastructure development Vietnam now has nine data centre operators, 30 cloud centres, 571,000 servers, and 54.7 million physical cores. Viettel Group operates 13 data/cloud centres, VNPT seven, and the rest run by other businesses.

Attention seized in data centre growth International players are devising strategies to develop data centres in both the public and private sectors for Vietnam’s digital evolution.