The JASH markets in APAC – Japan, Australia, Singapore and Hong Kong – have all emerged as top tier data centre markets and the growth has been driven to a large extent by hyperscale cloud expansion. Elsewhere in APAC, a second tier of markets, of which many are in Southeast Asia, has developed at a slower pace. The Philippines shares many of the same characteristics of other young and nascent markets. Telcos have limited competition and dominated the market and organizations have stuck with traditional IT models or even used nearshore infrastructure options such as hosting and cloud services in Hong Kong, Singapore or Australia. And of course, hyperscale cloud has not yet landed.
The Philippines has consistently flown under the radar up until just the last few years. But the sudden push to bring in-country hyperscale cloud infrastructure to the Philippines, driven by solid underlying fundamentals, spurred interest literally over night. Alibaba Cloud was the first to land and AWS will bring online Local Zones nodes that perhaps will translate over time into core regions. A number of the other major cloud platforms are expected to follow suit. Again following the pattern seen in other emerging markets, the entry of cloud platforms has ignited demand for data centre colocation as self-building is not an option given the lack of scale, time to market is crucial and the relative unfamiliarity with the market creates operational and logistic challenges that need to be addressed.
The conditions are ripe for colocation providers to jump in and win business. In the last 12-18 months, data centre operators, real estate developers and investors have circled the market in anticipation of the demand that is expected to come. And the underdeveloped competitive landscape leaves the door open for tremendous opportunities and long-term growth potential.
The Philippines data centre colocation market, centred primarily around Manila, is in an early stage of development and is projected to be worth US$134m in 2022. The sector will grow steadily at a five-year CAGR of 25% through 2027. The Philippines is tracking to becoming a hyperscale market sooner than later. On a MW basis, total inventory is expected to grow at a five-year CAGR of 26%, with the hyperscale inventory portion growing at a much higher five-year CAGR of 48%.
This report is an excellent resource for any service provider, investor or enterprise end user looking to understand and project the data centre market in the Philippines or find a service provider. The methodology applied continues to be the most robust in the industry. We track supply on a space, rack and power basis, split all the metrics along retail and wholesale lines, and aggregate inventory in multiple tiers according to build status, absorption rates and maximum capacity levels. Hyperscale cloud nodes and on-ramps are mapped and a complete directory is provided.