With a inhabitants of 33 million, a sizeable GDP, and a burgeoning digital economic system, Malaysia has emerged as a number one contender as the subsequent knowledge heart hub in Asia. Pushed by hyperscale investments and powerful colocation demand, the Malaysian knowledge heart market is projected to develop at a quick compound annual development charge (CAGR) of seven% to $1.6 billion by 2027 from $1.1 billion in 2021, in accordance with knowledge from Arizton Advisory and Intelligence.
The sturdy development could be attributed to a confluence of things reminiscent of elevated curiosity in cloud providers stemming from the rising adoption of cloud computing, government-backed initiatives to draw new investments in knowledge facilities, and the continued results of the Singapore knowledge heart moratorium.
Throughout the nation, different drivers embrace a digital shift within the type of a surge of web customers, which reached 96.8% of the inhabitants in comparison with 89.6% in 2020, whereas development and digitalization of economic sectors like BFSI, manufacturing, IT, and logistics are propelling knowledge heart infrastructure demand and contributing to Malaysia standing as one of many area’s most dynamic knowledge heart markets.
Chart-Topping Data Center Development
These developments didn’t happen in a vacuum. For years, Malaysia has strategically positioned itself as an information heart vacation spot and pushed for investments in digital infrastructure. As an illustration, the Malaysia Digital Financial system Company (MDEC) has performed an lively position in implementing packages to draw overseas investments within the digital sector, together with knowledge facilities.
Virtually three many years in the past, the Multimedia Tremendous Hall (MSC Malaysia) was established to speed up the expansion of the nation’s digital economic system with a particular financial zone designed to help the IT ecosystem and IT-enabled industries. The MSC extends from downtown Kuala Lumpur, the capital of Malaysia, all the best way to Negeri Sembilan. Protecting round 750 sq km in space, it consists of the cities of Putrajaya and Cyberjaya, with the latter established to create a metropolis targeted on info expertise.
Trade observers will level to 2 high-growth areas for knowledge facilities in Malaysia immediately: The Larger Kuala Lumpur which encompasses Central Kuala Lumpur and Cyberjaya, and the state of Johor situated on the finish of the Malay Peninsula. Cyberjaya has lengthy been a major knowledge heart location within the nation on account of its sturdy infrastructure and connectivity; new amenities are continuously constructed there and at Bukit Jalil additional up which has a much less constrained energy grid.
Johor has substantial capability underneath development and extra amenities within the pipeline. Although solely a small proportion is presently in operation, it’s estimated that Johor will see RM17 billion price of latest funding in knowledge facilities in 2024 alone. The speedy buildup is buoyed by its proximity to Singapore, which has an information heart emptiness charge of simply 2%, and the place the supply of darkish fiber connectivity throughout land hyperlinks provides Malaysia an edge to service one among Asia Pacific’s largest shoppers of knowledge.
Renewables within the Pipeline
The speedy improvement of knowledge facilities in Malaysia wouldn’t be full with out highlighting Malaysia’s concerted push to develop its renewable assets. Information facilities eat a prodigious quantity of energy to serve the ever-increasing demand for knowledge storage and processing. As the worldwide neighborhood turns into extra environmentally aware, the necessity for inexperienced vitality sources turns into paramount for knowledge heart operators to scale back their carbon footprint and keep a sustainable enterprise mannequin.
Malaysia has made speedy progress in transitioning from a closely fossil fuel-dependent vitality combine to a extra sustainable one. In 2020, pure fuel constituted the biggest portion at 42.4% with crude oil and coal making up a lot of the relaxation – a mere 3.9% got here from renewables. However by March 2023, Malaysia’s share of renewables was 25%, in accordance with the Malaysian Funding Improvement Authority.
This places Malaysia on observe to reaching the targets acknowledged within the Malaysia Renewable Power Roadmap (MyRER) through which the federal government goals for renewable vitality to offer 31% (13 GW) of the nation’s vitality wants by 2025, 40% (18 GW) by 2035, and 70% by 2050.
The Malaysian authorities has launched a number of initiatives to advertise renewable vitality improvement and is shifting forward with a number of plans to harness renewable vitality sources reminiscent of photo voltaic and hydroelectric. In the end, the supply of renewable vitality is essential to the info heart trade and addresses issues concerning sustainable energy scalability, in addition to assembly the calls for of hyperscalers and colocation suppliers.
A Strategic Hub in Asia
Asia Pacific is about to develop into the world’s largest knowledge heart area over the subsequent decade. As a area, Southeast Asia is experiencing speedy digitalization and seeing rising demand for knowledge facilities. Malaysia, with its strategic location, digital infrastructure, and powerful authorities help, is well-positioned to capitalize on this development and set up itself as a key participant within the knowledge heart market.
Kelvin Fong joined EdgeConneX in 2021 as Managing Director for the Asia-Pacific Area. Kelvin brings in depth expertise within the knowledge heart trade, and particularly in knowledge heart improvement in Asia. His observe document extends to twenty years of knowledge heart improvement, operations and administration throughout the continent.
