Q2 2021: APAC Infrastructure Quarterly Report

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Asia Pacific Internet Infrastructure Sector Overview Q2 2021

Executive Summary

The infrastructure services landscape in APAC continues to evolve and hyperscale remains the driving force. Adoption of cloud is on the rise in emerging economies, while in more advanced markets, things are moving to another level. All of these trends were already in motion prior to the outbreak of the COVID-19 pandemic. And not even two years on, the pandemic has set off a wave of growth acceleration as the shift to digital continues to quicken.

It has not all been smooth sailing. The earlier economic recoveries in the region have not all gone well of late. The Delta variant has caused a streak of lockdowns across the region and little if any travel is happening. Two of the largest economies – India and Indonesia – have had disastrous infection waves. There are also reports of delays with supply chains and data centre construction projects. Meanwhile, geopolitical tensions have become a permanent feature of the landscape and there are internal barriers being erected in China as the government tries to assert more regulatory oversight over the technology sector.

Despite the many moving parts, against a very complicated backdrop, the long-term prospects for the sector continue to be strong. Investment interest has never been higher and real estate and logistics firms are moving into a landscape that has a relative shortage of experienced data centre operators and entrepreneurs. The global platforms are also spending more time on the region and acquiring and partnering in pursuit of some of these lucrative opportunities. Overall, this is a market still in its formative years and the current pace of hyperscale growth points to unprecedented upside.

This report takes a closer look at the most noteworthy themes and developments that took place in the infrastructure services market in 2Q21. It is a regional supplement to Structure Research’s other quarterly update reports.