The world's largest carrier neutral DC (data centre) company, Equinix Inc, is planning to invest an additional US$200 million to boost its DC operations in the Asia-Pacific region.

In Singapore, the company runs two huge DCs that occupy about 250,000 sq ft of space.

The company has so far invested US$135 million in its two DCs in Singapore, making Equinix the Republic's largest carrier neutral DC vendor. 'Carrier neutral' means it is not part of any telco, such as Singapore Telecommunications (SingTel), which also has its own DCs in Singapore.

Nasdaq-listed Equinix will also use the funds - procured as loan from various banks, including DBS Bank - to expand in Hong Kong, Sydney, and Tokyo, apart from Singapore, Equinix's Hong Kong-based Asia-Pacific president, Samuel Lee, told BizIT in an interview.

DCs are secure facilities where large enterprises like banks, retail chains, governments and insurance firms store, sort and transact their data. A typical

DC would have hundreds of computer servers and storage - interconnected by high-speed fibre-optic cables - to process credit card payments, online transactions and other mission-critical information.

'We continued to experience strong growth within the Asia-Pacific region even during the global recession in 2009, and more so this year,' Mr Lee says. 'In fact, last year we opened a second DC in both Singapore and Sydney, and expanded our Hong Kong DC as well. This year the boom is back and we should see a strong surge in enterprise data. Much of that data would need to sit in DCs.'

In 2008, Singapore had a total of about 170,000 sq m of DC capacity, up 15 per cent over 2007. Not much capacity was added in 2009 due to the recession in 2008. But in 2010, demand may outstrip supply by up to 20 per cent, according to industry sources. Apart from Equinix, there are a slew of DC players such as  SingTel, NCS, Tata Communications, ST Engineering and Fujitsu Asia.

Equinix employs about 250 people in Asia and has more than 700 customers. Globally the company has 1,600 employees and 3,000 customers, including SingTel, AT&T, NTT, Sprint, Verizon, IBM, Facebook, General Electric, Google, Hewlett Packard, Sony, Yahoo, and Google, among other large enterprises.

'We operate 87 DCs in 35 cities and more than 575 network service providers rely on our DCs for their mission-critical data transactions,' Mr Lee says. 'For example, this month the Australian Securities Exchange launched a new solution line to give its US-based clients direct access to the futures market. That solution is hosted on an Equinix DC. And India's Reliance Globalcom, which owns the world's largest private undersea cable system, is expanding its connectivity to 230 countries via our DCs.'

Another huge impetus for DCs comes from the rapidly rising concept of cloud computing, where software is delivered as a service (SaaS) from remotely located DCs. Cloud computing is still in an embryonic phase and accounts for less than one per cent of total IT spend. However, SaaS uptake is rising, worldwide and in Asia. In 2009, it was a healthy US$13 billion market, or 5 per cent of the software market. Based on research house IDC's estimates, it is

growing five times faster than the software market as a whole.

According to industry analysts, the demand for DC space significantly outpaces supply in the Asia-Pacific, including Japan (APJ) region, with 50 per cent of the demand being driven by government initiatives, and the rest by Internet media, telecom and IT companies.

'Demand for DC hosting currently exceeds supply,' research house Frost & Sullivan's analyst Wu Chengyu says. 'In fact, over 80 per cent of the major DCs in the Asia-Pacific are running at close to 90 per cent capacity, and space is at a premium.'

In 2009, the market for DC services in the APJ region was about US $8 billion. That's set to cross US$10.6 billion by 2011.

Source : The Business Times © Singapore Press Holdings Ltd. Reprinted with permission.