The Asia-Pacific cloud infrastructure market is currently undergoing a transformative boom, poised to achieve a staggering market valuation of USD 593.7 billion by 2032.
According to Astute Analytica, this exponential growth, fueled by a robust compound annual growth rate (CAGR) of 25.93% forecasted during the period of 2024 to 2032, underscores the region's pivotal role in the global technological future.
APAC’s Regional Cloud Infrastructure Markets
China has emerged as a frontrunner in the cloud infrastructure market, bolstered by a burgeoning data center sector, which is anticipated to reach USD 35 billion in 2024. The country's ascent is propelled by substantial investments in cloud services and technological innovations, elevating China to a prominent ninth position globally in technology prowess. Major corporations like Apple are significantly contributing to this expansion, intensifying their investments in data centers to bolster their cloud infrastructure capabilities.
Meanwhile, India stands as another cornerstone of the Asia-Pacific cloud infrastructure landscape, driven by economic growth projected to hit 6.3% in 2024. This economic surge is closely intertwined with the rapid adoption of cloud-based contact center solutions, meeting the demand for scalable and flexible customer service solutions. India's fast expansion in the data center market presents its steadfast commitment to digitalization and cloud adoption, cementing its status as a key player in the regional market. Jio, in partnership with NVIDIA, is developing advanced AI cloud infrastructure, positioning India favorably in the global AI and cloud technology landscape.
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Indonesia is following suit with an expanding cloud infrastructure market, buoyed by increasing internet penetration and widespread digital transformation initiatives. Similarly, Japan, with an anticipated economic growth of 2% in 2023, has maintained its leadership in technological innovations, driving robust growth in its cloud infrastructure market. Notably, in 2023, MUFG, Japan's largest financial services provider, selected AWS as its preferred cloud provider in order to accelerate its cloud-first strategy.
South Korea, renowned for its technological prowess, is swiftly embracing cloud-based solutions to enhance its digital infrastructure capabilities. The country's expanding data center market displays the growing appetite for cloud services and digital transformation initiatives. In 2021, ST Telemedia Global Data Centers (STT GDC) announced a strategic partnership with Hyosung Heavy Industries to jointly develop and operate South Korea’s first carrier-neutral data center campus.
Vietnam, amidst rapid digitalization, has witnessed a surge in demand for data center infrastructure, supported by substantial investments aimed at bolstering the digital economy. STT GDC and VNG have partnered to drive data center development in the country, while Viettel unveiled a cutting-edge data center in Hanoi in April this year.
Singapore, the technological hub of Southeast Asia, is also playing an important role in driving the Asia-Pacific cloud infrastructure market forward. Console Connect and Princeton Digital Group have teamed up to bolster cloud businesses in the region. Additionally, Singtel is leveraging NVIDIA-powered AI cloud technology to enhance its next-generation Nxera data centers. With a technological advancement score of 40, Singapore's data center market is experiencing massive investment.
Moreover, during the 10th AWS ASEAN Summit in Singapore, Amazon Web Services (AWS) announced intentions to increase its investment in cloud infrastructure in Singapore, pledging an additional SGD 12 billion from 2024 to 2028.
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Meanwhile, Converge ICT Solutions Inc. has teamed up with South Korea’s NAVER Cloud Corp. to tap into the cloud market in the Philippines. The partnership involves a Memorandum of Understanding (MoU) between the two companies, aiming to leverage NAVER Cloud's advanced solutions. Their collaboration seeks to develop tailored cloud services that meet the specific requirements of Filipino consumers and businesses through ongoing discussions and engagements.
The adoption of private cloud infrastructure is a key driver within the Asia-Pacific cloud infrastructure market, fueled by significant annual investments in cloud IT infrastructure. Moreover, tech giants, such as Google, have notably injected over USD 2 billion into the region's network infrastructure since 2010.
Commenting on the role highly capable core networks play in the expansion of Cambodia’s cloud infrastructure market, Andrey Kuzin, CTO, Smart Axiata, highlighted that Smart Axiata has “dedicated a significant amount of time and resources to elevate our [its] core network, radio and transport networks. Over the past three years, we've invested approximately 60 to 70 million USD annually in capital expenditures. This ongoing commitment has allowed us to build a future-proof, highly capable network. Our network operates within an on-premise cloud infrastructure, which provides us [Smart Axiata] with remarkable scalability and control over our [its] network's capabilities.
Leveraging Hyperscale Data Centers for Ecosystem Expansion
The Asia-Pacific data center market is expected to attract investments reaching USD 100 billion over the next five years. This year, the market size is projected to reach 14.27 thousand MW, with anticipated growth to 23.2 thousand MW by 2029 at a CAGR of 10.21%.
Concurrently, colocation revenue is forecasted to rise from USD 27,921.7 million in 2024 to USD 50,310.9 million by 2029. These developments reflect the region's global data center ecosystem, due to the escalating demand for cloud infrastructure.
The surge in data center investments is intricately linked to the expansion of the cloud infrastructure market across the Asia Pacific. Businesses increasingly rely on cloud services to underpin their digital transformation endeavors, leveraging the scalability and flexibility offered by cloud platforms. A hybrid or multi-cloud approach is gaining prominence, with a significant portion of mission-critical workloads expected to run on traditional data center infrastructure and private cloud setups.
Hyperscale data centers are emerging as key enablers of this growth, with a projected CAGR of 36.5% from 2024 to 2032 in the Asia-Pacific cloud infrastructure market. Major players such as AWS, Microsoft Azure, and Google Cloud are heavily investing in hyperscale facilities to cater to soaring demand. These investments are critical for enhancing data management efficiency and facilitating seamless data mobility across diverse deployment environments, essential for achieving robust digital business strategies.
Furthermore, Bridge Data Centers is expanding its hyperscale campus in Kuala Lumpur, enhancing Malaysia's capacity to support growing digital demands. In March 2024, ePLDT's VITRO Inc. launched the largest hyperscale data center in the Philippines, marking a significant milestone in the country's digital infrastructure development.
Telekom Malaysia is also making strides, with plans to construct a new hyperscale data center to complement its existing facilities in the Klang Valley and Iskandar Puteri. Further demonstrating its commitment to innovation, Telekom Malaysia, in collaboration with Nxera, launched a hyperscale AI-ready campus in Johor.
The expansion of cloud infrastructure not only supports business operations but also drives innovation across various industries, fostering economic growth throughout the region. As the Asia Pacific solidifies its position as a global hub for data centers and cloud services, continued investments and advancements in infrastructure will play an essential part in shaping the digital future of the entire region.
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