Further proof of Singapore being a centre of commerce in Asia has been given by Equinix as it announced a second phase of expansion in its third data centre in the area. The third International Business Exchange™ (IBX®) data center in Singapore Equinix will increase capacity to 3000 cabinets. A total of $350M has been invested in Singapore to date.
In the last five months Equinix has opened new data centres in New York, Melbourne, London, Toronto as well as SG3 (Singapore) in March. That Equinix are already having to expand SG3 after such a short time is an indication of the market demand for their services, including the Equinix Cloud Exchange.
Will SG3 continue to grow?
Singapore is recognised as one of the leading international financial hubs and multinational companies are seeking at least presence in the location that in turn is leading to additional demand for localised computing. The expansion is coming at a time when there are some warning signs that Singapore’s growth is at least slowing down. It still remains a gateway to Asia and is seen as a good location for basing multinationals, parking money and providing a neutral location for settling lawsuits.
It is in this latter market that there are signs that the growth is slowing and that Equinix they may be taking a small risk on such large growth. Legal dispute fees are believed to have dropped by 18.5 per cent in the first half, against a 2.7 per cent rise in Hong Kong. The stock exchange has seen no significant listings this year, in fact the largest scheduled, Canada’s Manulife Financial Corp MFC.TO of a real estate investment trust at USS420 million was shelved last month.
Expansion of Cloud compute in Singapore or Asia
That the expansion is continuing may not be solely because of Singapore though. The data centres based there act as a hub for the wider Asia, providing high bandwidth interconnection across Singapore and the entire Asia Region. Equinix have already invested $7.5 billion over the last 16 years to this expansion and show little signs of slowing down.
With this announcement SG3 will have the largest capacity of the Singapore data centres, SG2 has a final capacity of 1700 cabinets. There is still room for growth though as SG3 has a maximum capacity of 5000 cabinets, almost triple the size of SG2. If Equinix announce a further expansion of SG3 this year then it should be seeing significant revenues from the region
Forrester picks Singapore for Data Centre expansion
According to the Forrester report Strategically Source Your Next Data Centre (Data Centre Purchasing Drivers, Priorities, and Barriers for Asia-Pacific Firms) 78% per cent of firms in Singapore want to outsource their IT, compared to 51% in Australia. The percentage is also high in Japan (69%), where Equinix already have four data centres in Tokyo and another in Osaka.
Fujitsu are one of the key customers within the SG3 in Singapore and Mr Minoru Ikeda, Senior VP of Fujitsu Asia commented “Our challenge was to implement and maintain a consistent global service delivery process and standard, with the flexibility to respond quickly to local market conditions. Scalability, high availability and performance were also critical factors to our data centre decision,”
“As a result of these challenges, we decided to work with a partner who could provide us with the speed to market, whilst maintaining the quality levels and service standards that our customers have been accustomed to in Japan. Equinix’s IBX center has proven valuable in enabling us to rapidly go-to-market when we first introduced outsourcing services, and now to scale accordingly as our business grows.”
Location, Location, Location
For data centres this well-known estate agency phrase resonates well. The three Equinix data centres are all in close proximity and will enable some of the older Equinix customers to easily expand from SG1 using low latency connections that will be implemented between the sites. In total $54 million is being committed to this second expansion of SG3 and one wonders what the ROI of that investment will be. Fujitsu fall into a category of customers that provides a quarter of all of Equinix’s revenue, cloud and IT providers. As enterprises start to outsource their infrastructure and IT will increasing velocity ensuring that the CSP is using a blue chip, carrier neutral data centre must form part of the due diligence.
Clement Goh, managing director, Equinix South Asia commenting on the announcement said ““Singapore is en-route to becoming a Smart Nation, integrating all aspects of technology into a coherent and cohesive whole to improve the way people live, work and play. We hope to support Singapore’s vision by providing our customers with direct access to established business ecosystems. Increasingly companies see great potential in multi-cloud access and the importance of a strong, reliable, yet flexible solution. SG3 phase two was launched to help companies like Fujitsu ensure that they are in a solid position to support their customers’ needs.”