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Meeting the digital demand of tomorrow, today

Meeting the digital demand of tomorrow, today

Thailand is renowned as a top tourist destination with its natural beauty and historical riches. But beneath the famed Thai hospitality and tourist attractions, the Kingdom is also a growing economic powerhouse with the second-largest economy in Southeast Asia. With the Thailand 4.0 economic initiative, it has sought to position itself as the region’s digital hub with a transition to an innovation-driven economy.

The comprehensive plan includes support for technology-based programs, a sharply increased research and development expenditure, a slew of tax incentives, and new policies to encourage foreign direct investments1. Unsurprisingly, this has led to a thriving startup ecosystem and a rapidly growing digital sector in the country.

The catalyst for digital demand

As part of the digitalisation of every sector, various digital platforms and IT service providers have been springing up over the last few years. They include e-commerce and streaming media companies, as well as international public cloud service providers such as Tencent and Huawei. E-commerce behemoth Alibaba has also set up a digital hub in Thailand to facilitate better cross-border trade for the company’s popular e-commerce platform.

The digital sector still has some growing up to do, however. As noted by 451 Research in a commissioned report titled “Thailand: MTDC Market Assessment”2, much of the multi-tenant data centre (MTDC) demand in the Thai market today is concentrated on the local financial sectors in the form of banking, securities and insurance verticals, as well as the telecommunications industry.

While data centres have yet to reach mass adoption status with enterprises in the country, the report concedes that Thailand 4.0 might well be the catalyst to influence rapid changes that favour the colocation industry. As the country moves towards building smart cities and focusing on industries such as robotics, biochemical, and medical services, this is good news for data centre providers given how many of these industries favour colocation.

Key challenges to consider

As demand for data centres grows in Thailand, there are some inevitable challenges that the industry will need to address. For a start, existing facilities are geared towards traditional power capacities, and might not be available in the right configuration for cloud providers or power-dense enterprise deployments. Providers are already in the process of upgrading their facilities or adding capacity designed for modern workloads, though, so this will change soon.

A more subtle consideration revolves around the locations of data centres. Specifically, many of the facilities are clustered around the Eastern Economic Corridor (EEC) areas of Chonburi, Rayong and Chachoengsao, a 13,000 sqm special economic zone that is part of the Thailand 4.0 masterplan. Various incentives such as land lease extensions and tax deductions have worked well to draw the data centres to serve new commercial and industrial parks there. However, these locations might be less accessible for businesses located in central Bangkok, with comparatively poorer latencies.

Another challenge would be the growing demand for reliability and security. This is not limited only to Thailand, of course, but it is a global phenomenon that is evidenced by growing compliance around data and the reliability of data centres. Aside from preparing IT systems and monitoring evolving regulations to ensure compliance, businesses can look out for data centers that are accredited with standards such as the Uptime Institute’s Tier-rating system or the Telecommunications Industry Association’s TIA 942 standard.

Capitalising on carrier-neutral facilities built to global standards

For many organisations with main offices in Bangkok, a downtown location closer to the centre of Bangkok might be preferred. Having the primary workloads nearby gives engineers easy access to the systems to quickly address unexpected system problems or perform urgent maintenance. Moreover, latency-sensitive applications such as enterprise applications or virtual desktop infrastructure (VDI) deployments will also work better. Of course, business continuity deployments or backup systems can certainly be placed outside the city, as with workloads that are latency tolerant.

It is worth noting that the data centre market in Thailand is maturing rapidly. While globally recognised standards such as those from Uptime Institute are well-recognised and requested often, industry players are working towards localised standards for the country. Regardless of whether this eventually bears fruit, a focus on the quality and standards of data centres is good and will only benefit providers and end users in the long term.

To meet demands for new facilities and help accelerate digital deployments in Thailand, STT GDC Thailand is currently constructing its first hyperscale data centre campus in the country, scheduled for launch in early 2021. STT Bangkok 1 is strategically located within the capital of Thailand, highly accessible from the central business district (CBD) of Bangkok and the main airport by key train lines, car or public transport. The campus has a total capacity of 40 MW and a gross floor area of 60,000 sqm when fully fitted out. You can learn more about our upcoming campus at Hua Mak, Bangkok here.

¹Thailand Board of Investment (BOI), Thailand 4.0 – a new value-based economy
²451 Research Special Report, Dec 2019, Thailand: MTDC Market Assessment

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