With a inhabitants of 33 million, a sizeable GDP, and a burgeoning digital financial system, Malaysia has emerged as a number one contender as the following information middle hub in Asia. Pushed by hyperscale investments and powerful colocation demand, the Malaysian information middle 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, based on data from Arizton Advisory and Intelligence.
The robust development might be attributed to a confluence of things equivalent to elevated curiosity in cloud providers stemming from the rising adoption of cloud computing, government-backed initiatives to draw new investments in information facilities, and the continuing results of the Singapore information middle moratorium.
Inside the nation, different drivers embody a digital shift within the type of a surge of web customers, which reached 96.8% of the inhabitants compared to 89.6% in 2020, whereas development and digitalization of economic sectors like BFSI, manufacturing, IT, and logistics are propelling information middle infrastructure demand and contributing to Malaysia standing as one of many area’s most dynamic information middle markets.
Chart-Topping Knowledge Middle Progress
These developments didn’t happen in a vacuum. For years, Malaysia has strategically positioned itself as a knowledge middle vacation spot and pushed for investments in digital infrastructure. As an example, the Malaysia Digital Economic system Company (MDEC) has performed an energetic function in implementing applications to draw international investments within the digital sector, together with information facilities.
Nearly three many years in the past, the Multimedia Tremendous Hall (MSC Malaysia) was established to speed up the expansion of the nation’s digital financial system with a particular financial zone designed to assist 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. Masking round 750 sq km in space, it contains the cities of Putrajaya and Cyberjaya, with the latter established to create a metropolis targeted on data expertise.
Trade observers will level to 2 high-growth areas for information facilities in Malaysia at the moment: The Better 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 information middle location within the nation resulting from its robust infrastructure and connectivity; new services are continuously constructed there and at Bukit Jalil additional up which has a much less constrained energy grid.
Johor has substantial capability underneath building and extra services within the pipeline. Although solely a small proportion is at the moment in operation, it’s estimated that Johor will see RM17 billion value of latest investment in data centers in 2024 alone. The fast buildup is buoyed by its proximity to Singapore, which has a knowledge middle emptiness charge of simply 2%, and the place the supply of darkish fiber connectivity throughout land hyperlinks provides Malaysia an edge to service certainly one of Asia Pacific’s largest customers of knowledge.
Renewables within the Pipeline
The fast improvement of knowledge facilities in Malaysia wouldn’t be full with out highlighting Malaysia’s concerted push to develop its renewable assets. Knowledge facilities devour a prodigious quantity of energy to serve the ever-increasing demand for information storage and processing. As the worldwide group turns into extra environmentally acutely aware, the necessity for inexperienced power sources turns into paramount for information middle operators to cut back their carbon footprint and preserve a sustainable enterprise mannequin.
Malaysia has made fast progress in transitioning from a closely fossil fuel-dependent power 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%, based on the Malaysian Investment Development 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 power to offer 31% (13 GW) of the nation’s power wants by 2025, 40% (18 GW) by 2035, and 70% by 2050.
The Malaysian authorities has launched a number of initiatives to advertise renewable power improvement and is transferring forward with a number of plans to harness renewable power sources equivalent to photo voltaic and hydroelectric. In the end, the supply of renewable power is essential to the info middle trade and addresses considerations concerning sustainable energy scalability, in addition to assembly the calls for of hyperscalers and colocation suppliers.
A Strategic Hub in Asia
Asia Pacific is ready to turn into the world’s largest information middle area over the following decade. As a area, Southeast Asia is experiencing fast digitalization and seeing growing demand for information facilities. Malaysia, with its strategic location, digital infrastructure, and powerful authorities assist, is well-positioned to capitalize on this development and set up itself as a key participant within the information middle market.
Kelvin Fong joined EdgeConneX in 2021 as Managing Director for the Asia-Pacific Area. Kelvin brings intensive expertise within the information middle trade, and particularly in information middle improvement in Asia. His observe report extends to twenty years of knowledge middle improvement, operations and administration throughout the continent.
