Asia Pacific-based organizations and multinational corporations entering the region are fueling demand for data center resources, space, and power. A number of factors are accelerating this demand including the need for businesses to be closer to a growing customer base that expects nuanced, or personalized, service anytime, anywhere, on any device.
Highlights from the Forrester Webinar on Singapore Data Center Colocation
Two Forrester analysts based in Asia Pacific joined Zeena Saleem, marketing director at IO.Singapore, on a webinar titled “The Lion Data Center: Singapore’s Place in a Global Data Center Strategy.” Dane Anderson, Asia Pacific Region Manager for Forrester Research, and Naveen Chhabra, Senior Analyst for Infrastructure and Operations, explored in practical terms why Singapore is a strategically strong data center location for local, regional, and multinational companies.
Asia Pacific is a wide and diverse region
IO opened its first data center outside of the United States in Singapore two years ago. (Read about IO.Singapore.) “IO has done some very interesting things,” said Dane Anderson, who monitors what he says is a growing Singapore data center market.
Opening the webinar, Anderson, an American who has lived in Asia Pacific for 21 years and in Singapore since 1997, explained how vast and diverse the Asia Pacific region is – 60% of humanity, or 4 billion people, live there. They speak 3,500 languages. Depending on location, level of IT sophistication can be very high, or very low. Nevertheless, the region has the world’s largest base of connected customers.
The Age of the customer
Connectivity is driving changes in the way companies in Singapore and around the world think about their data center strategy. “Forrester’s research has shown that the power has shifted from the company to the individuals,” Anderson said. “Expectations are changing faster than companies can change their business models, technologies, and operations to keep pace. We hear this from our customers time and time again. It’s difficult to keep up with the rising expectations of their customers.”
Why is that? What do customers expect now that they didn’t used to expect? Anderson said customers are used to:
- Near-perfect pricing information
- Reviews from other customers
- Anywhere, anytime, any device ability to make purchases and retrieve information
- Contextual data – proactive personalized analytics delivered in the moment of decision
- And of course they want it to be reliable and secure
Forrester research shows that although customers are no longer bound by the constraints of location – cross-boundary retail sales are common in Asia Pacific – the need for speed, latency, and the ability to meet local needs means that location does matter. (Read our perspective on that.)
The importance of being on the ground, being local
Historically, customers were drawn to multinational brands, but Anderson said that is no longer the case. As the Singapore economy developed and strengthened, the gap between what local companies and multinational firms can provide has narrowed.
Forrester’s Infrastructure and Operations researcher Naveen Chhabra said it is imperative that multinational organizations increase their presence and bring their services directly into Asia Pacific. The more connected, more discerning customer today is less likely to follow major brands thinking they are better; customers are increasingly turning to local brands.
The multinational companies that can’t compete locally do indeed fall behind. A firm’s data center strategy must align with its business objectives, Chhabra stressed. As those strategies drive organizations to think more locally about their customers, they should do the same with their data centers.
Your physical strategy dictates user experience
Chhabra’s argument for a company’s data centers being close to its customers hinges on those changing customer expectations Anderson talked about. “Today’s world is a world of composite application,” he said. “That means multiple applications connect to each other. Response time, or application latency, can be a very complex combination of distance between your own data center resources, the external resources you depend on for service delivery, and the distance between the end user and your resources.”
“The law of physics applies and dictates that the customer-centric service design has to start with your physical location.”
So you’re interesting in Asia Pacific, what now?
Top of Chhabra’s list for CIOs to consider when shopping for a data center colocation site was to find a data center provider who could get your business up and running quickly and who has capacity for you to grow and scale that business.
Table stakes – your data center must be:
- Agile and scalable
- Always on and always available
- Optimized and efficient
- Geographically accessible
In addition to that, Chhabra offered a list of criteria to consider during a data center search (in his words):
- Proximity to key markets, the users, and suppliers: “Technically a data center can be accessed remotely from anywhere, but in reality many organizations find it convenient to locate their primary data centers relatively close to where they operate. And hence it would make sense for you to have the data center closer to existing and potential customers in Asia Pacific.”
- Stable power supply: “Data centers, as we know, are energy intensive capital assets that require an enormous amount of electricity to run and cool energy dense heat-generating IT equipment. Data centers in tropical regions also require extra power to control humid conditions. This is quite important when we look at the geographic differences between North America and Asia Pacific.”
- Critical infrastructure: “Telephone networks are a critical element, because the market never stops demanding faster, better, and higher volume transactions.”
- Availability of skilled people: “Local skilled talent is necessary to effectively build and run a data center. Build a good relationship with the local stakeholders, the partners, suppliers and utility companies; they can positively impact your reliability and resiliency. Customers emphasize the importance of communications on a daily basis, but it becomes even more critical when a disruptive event happens.”
- Capacity planning: “This is an essential element of business planning, but it is equally difficult to achieve. We have two results: Overbuilding or underbuilding. Overbuilding is expensive from the start, but underbuilding can be expensive in the long run and can lead to inability to meet the customer demand.”
- Availability, uptime, and planning: “This is critical to business operations. Nobody wants the system to fail, but as the saying goes, if anything can go wrong it will go wrong. You should be prepared for any planned or unplanned failures.”
- Optimized and efficient: “Your business depends on the services inside the data center. Cloud services span across multiple use cases, multiple requirements. It is time for IT professionals to take ownership of that business cloud acquisition. Make cloud services part of the IT strategy rather than having a set of disconnected initiatives.”
How Singapore stacks up, according to Forrester
According to Anderson, new data center business is considering Singapore for the same reasons IO did, because the market’s benefits include:
- An opportunity to move into a rapidly growing region
- Availability of well-connected, world-class infrastructure
- Excellent political and social stability
- Shelter from natural disasters – tsunamis and typhoons are not a problem because Singapore is shielded by the island of Sumatra
- Strong, English-speaking workforce with good cross-border skills – Singapore is a very culturally versatile location and is a respected country in the region
- Home to multinational corporations – both customers and partners
- A major hub for data center suppliers, which makes it easier to find talent and suppliers to support the strategy than others
Key takeaways from “The Lion Data Center: Singapore’s Place in a Global Data Center Strategy”
Wrapping up, Anderson listed these key takeaways for customers considering Singapore as a data center location. It is important for CIOs or other IT leaders to:
- Align the company’s data center strategy to its business outcomes in Asia Pacific.
- Focus on service quality; a data center strategy needs to be considered that can bring compute closer to customer. That’s the only way it will be able to scale and provide the service that customers now expect.
- Strategically incorporate third-party services; focus on the areas you do best and the parts of the business that you can differentiate.
- Consider Singapore as a data center hub; it’s a good location to support a company’s expanding presence across the Asia Pacific region.
Founded in 2007, IO provides the data center as a service to businesses and governments around the world. Learn more about the IO Singapore data center.