Executive Summary
The COVID-19 pandemic continues to have a profound impact on all facets of life. It has brought on changes that have caused Internet usage to spike, and this in turn, has created demand for Internet infrastructure services. Hyperscale cloud has been the primary beneficiary. It hosts much of the infrastructure that supports the most widely used applications as well as the content being consumed on an elevated basis.
Hyperscale is driving demand to such an extent that countries like Japan and Australia (outside of China and India) are now home to two hyperscale markets. There is also an emerging tier of hyperscale markets such as Indonesia, South Korea and Malaysia. Self-builds remain rare across the region and this has created a steady stream of demand for wholesale data centre capacity.
Hyperscale cloud is also creating the conditions for interconnection to flourish. Organizations are moving workloads off-premise and into different infrastructure deployment models, with public cloud a popular destination. This will create increasingly distributed architectures and bringing all this together is the ability to interconnect. IT decision-makers want to host critical infrastructure, but also figure out how to extend and take advantage of the public cloud. Data centre operators now have to tell both sides of this story.
While hyperscale continues to grow and expand, there is early movement out to edge locations. Some of these edge markets will coalesce around subsea cable landing stations and others will emerge around second tier locations. Investment capital and experienced operating teams are looking at these opportunities more closely and new providers are being formed.
This report takes a closer look at the leading themes and developments that took place in the APAC infrastructure services market in 2Q20. The pandemic continues to dominate the landscape, but there are early signs that the sector is well-positioned to push through the downtown relatively unscathed and take full advantage when they recovery starts.
