Market Trends of Singapore Data Center Rack Industry
Media and Entertainment Expected to Hold the Major Share
- The media and entertainment industry is expected to hold the highest market share in the data center market and is expected to register a CAGR of around 7% by 2029. This doubling in just three years suggests the growing demand for data center Racks in the Media and Entertainment industry.
- The country's inhabitants have embraced the OTT platform market, which gained traction during the pandemic. Attracted by South Korean TV shows and the work-from-home environment amid the COVID-19 pandemic, more consumers in Singapore tuned in to streaming services for their television fix last year at the expense of traditional TV programs.
- In 2022, 39% of OTT viewers in Singapore switched from traditional TV, the highest in the South East Asian region. The Philippines claimed second place at 29%, followed by Indonesia at 27%. Such instances are expected to create more demand for data storage space; thus, the need for data center racks will rise in the coming years.
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Full Rack is Expected to Grow Significantly
- In Singapore, due to growing space scarcity between various companies, the full rack has a majority of the market share. In order to cope with increasing rack capacity due to the rapid growth of mobile broadband, e-commerce services, and the increase in Big Data Analytics combined with cloud computing, it is necessary to build a fully rack-equipped data center.
- The market is witnessing strategic investments in e-commerce startups, which is further expected to increase online sales and demand for data center services in the market. For instance, in August 2022, Singapore-based FMCG major Believe Pte invested USD 8 million in beauty and skincare e-commerce startup Ohsogo, which offers a curated assortment of international brands and authentic products.
- At first, there was a limited focus on rack space in data centers; only size and cost were taken into account during deployment. Nevertheless, there is an opportunity for increased use of rack space in the data center as more and more users from different sectors, such as online banking, telecommunications, media and entertainment, and others, are adopting applications with higher density.
- Companies increasingly rely on data centers for efficient management of their databases and storage, as they generate significant amounts of data every day. The main driving factor for data center rack usage is, therefore, the increased deployment of fully configured data centers. Also, the growth of the market is being influenced by the growing demand for IT services and investments made by large companies.
- Moreover, Singapore is actively exploring the use of cold energy from the Singapore LNG Terminal to cool data centers and is building a floating data center park with the ultimate aim of harnessing seawater for cooling. Thanks to these advantages, players like Bridge Data Center, which initially dropped their expansion plans during the moratorium, have announced the construction of another facility in Johor with a capacity of 100MW.
