Singapore emerging as the cloud computing hub in Asia-Pacific
Global and regional service providers have invested in data centres to support new, advanced services in the region, which include cloud services. This has created a domino effect for demand, in particular, operators and MNCs require facility design expertise, network and IT infrastructure, the right staff skill levels, and an understanding of the operational requirements of data centres. The latest example is the announcement that Tata Communications is opening another enterprise-class data centre for providing outsourced IT services for its customers in Asia-Pacific, as part of its $180 million investment to provide data centre infrastructure and managed services in Asia-Pacific between 2009 and 2011. Other global telcos with data centres in Singapore include AT&T, BT, Verizon Business, SingTel, and Orange.
Japan , Singapore, and Hong Kong contain most of the data centres in the Asia-Pacific region. While the facilities in Japan are mainly to support its domestic market, Singapore and Hong Kong are competing to be the preferred location for hosting data centres for service providers that serve MNCs in the region.
As the major global financial hub of Southeast Asia, Singapore has strategic advantages. It has a stable government that has attracted many MNCs and 60% of MNCs with more than 7,000 employees have their Asia-Pacific regional headquarters in Singapore. It is also where most large software application developers such as Google and Microsoft choose to establish their regional presence. It is one of the major network hubs in the region, which is attractive to both carriers and MNCs. However, it suffers from high real-estate costs and faces serious energy supply challenges.
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Regionalisation will play to Singapore’s strengths
Since cloud service providers will need to offer demanding SLAs covering realtime and critical business applications in the cloud, the geographical location of the data centre is more important than ever. Having few large global data centres may allow providers to reach a large scale and take the greatest advantage of their concentrated resources. On the other hand, placing data centres closer to customers allows providers to enforce security policies, improve access to content, and reduce network latency. Finding the optimum balance between both approaches is a dilemma that telcos are starting to face. Centralisation on a regional level will be the answer, and Singapore is in an advantageous position as a result. Furthermore, the choice of network partners in Singapore increases its attractiveness.
As cloud-based offerings become more complex, Singapore may tighten its grip
Many of the early service offerings within data centres included basic co-location and network services, with very few complex managed services. However, telcos are starting to position themselves deeper in managed services, complex hosting, security, and IT services. In addition, the major global carriers are expanding this capability beyond their respective home regions to address global MNC requirements.
We think these developments will create a virtuous circle in Singapore. Most telcos in the region have built strong partner relationships and capabilities in these areas. The data centre has now become the same strategic hub for the global carrier as the wire centre was for the legacy local telecoms carrier.
Telcos have also invested in professional services teams in Singapore, thereby recognising the importance of professional services, especially at the early stages of CaaS deployment, supporting MNCs with their virtualisation transformation and early adoption of cloud computing services. Regional professional service capabilities or partnerships with local companies will be essential for coverage outside a carrier’s home region – and a critical mass of relevant expertise is on the verge of taking deep root in Singapore.
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