Data centers: A shining star in the property sector

The data center market is one of the bright spots in the country’s real-estate sector.

Monica Gonzalez, Santos Knight Frank Director and Data Centers Lead, Occupier Solutions and Services, pointed out that Covid-19 accelerated the dependence on data centers. With the demand for more video calls and hybrid work happening around the world, the demand for technology was quite obvious. The demand for co-location, internet, and cloud services required the need for sophisticated facilities based in-country.

There is no turning back, according to Gonzalez, as the global data center market is estimated to grow at an average of more than 13 percent every year to $143.4 billion by 2027, according to Research and Markets. By 2023, Asia Pacific is predicted to account for 30 percent of global center revenues. “Excitingly, the Philippines is near the epicenter of this wave of developments happening across the region.”

Gonzalez said the Philippines has been on the radar for data center operators primarily for the local population’s high digital consumption. The heavy use of the internet and social media by the Filipinos rose by 6.1 percent and 22 percent respectively between 2020 and 2021, according to Hootsuite.

Furthermore, government support, infrastructure investment, growing renewable energy sector, and availability of engineering and IT talent have made investors take a closer look at the Philippines. “Lastly, the country offers an important factor that some established hubs cannot: available raw land. Indeed, this has been the primary constraint of data center sector expansion in areas such as Singapore,” Gonzalez said.

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In fact, YCO Cloud Centers recently announced the construction of a 12-MW Data Center in Malvar, Batangas. The initial phase involves the construction of a 10,000-sq-m 2-story Data Center, including the first of four 3-MW data halls.

“The data center market is an exciting space for the Philippines. As the data center sector continues to grow alongside the increasing demand for data, we expect to see an upswing in activity for data center investments into the country,” Gonzalez said.

Going to the cloud

A big number of entrepreneurs are aware of the importance of digitalization. A majority (85 percent) of Philippine businesses plan a full-scale cloud migration in two years, while more than nine in 10 (91 percent ) of them will increase their investment in cloud in 2023, according to a survey entitled “The Next-Generation Cloud Strategy in Asia.” The survey was commissioned by Alibaba Cloud, the digital technology and intelligence backbone of Alibaba Group.

Moreover, the study observed that a spike in interest among local businesses is driven mainly by the rapid growth of the local data center market (78 percent) and the government’s steadfast plan for digitalization (79 percent). When it comes to selecting cloud vendors, security (85 percent), availability (74 percent) and expertise (62 percent) are the key factors considered by Philippine businesses, the survey shows. Businesses in the Philippines lead the pack on prioritizing security among its Asian counterparts followed by Indonesia (82 percent) and Thailand (78 percent).

 “Alibaba Cloud has prioritized providing highly scalable, robust and secure infrastructure to Philippine businesses. As we anticipate a rise in cloud adoption, Alibaba Cloud is committed to offering innovative and proven cloud solutions and services to Philippine businesses,” said  Allen Guo, Country Manager for the Philippines, Alibaba Cloud Intelligence in a recent roundtable held in Makati City.

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In the survey, the majority of the respondents revealed that insufficient training for employees is among the top barriers to cloud adoption. To help address this challenge, Alibaba Cloud has partnered with local IT-focused educational institutions—such as Asia Pacific College—to train and strengthen the cloud computing competencies of teachers and students as part of its efforts to support local digital talent empowerment in the Philippines.

 “The future landscape of cloud computing lies in the hands of the next generation, and as educators, it is our duty to foster and nurture their digital talents. Our recent collaboration with Alibaba Cloud has been instrumental in accelerating our mission to equip students with the essential tools to thrive in the current scenario, especially with the rising demand for cloud computing in local businesses,” stated Rhea-Luz Valbuena, Executive Director, School of Computing and Information Technologies, Asia Pacific College, from the event.

During the roundtable, Alibaba also introduced new enterprise and sustainability solutions—including Wuying Workspace and Energy Expert—to meet Philippine customers’ intelligent transformation demands.

To provide Philippine businesses with unlimited computing power without making significant upfront hardware investments, Alibaba Cloud offers Wuying Workspace, a secure cloud-based solution that enables desktop environments to be created, deployed and managed quickly and easily.

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The article was originally published in Business Mirror.

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