As the economy grows and more companies adopt new technologies to streamline their operations and improve efficiency, data centers in Vietnam are experiencing a boom. But the sector is still in its infancy and infrastructure has to scale up quickly to meet the demand. It’s also essential for service providers to ensure reliable energy supply and have strong understanding of the country’s complicated regulatory landscape.
Up until what is m&a recently, the country had strict rules for foreign ownership of data and cloud companies, but that changed this week. The new Law on Telecommunications eliminated the 49% limit for foreign ownership, which allows full ownership of data and cloud businesses by investors from abroad. This is a good thing for the industry as it will help attract foreign investment as well as boost technology capabilities in the country.
Google is one company which is profiting from this policy shift. A source close to these plans has stated that Google is considering an «hyperscaled» data center near Ho Chi Minh City. The venture which the source did not specify in terms size, could be a significant boost for the data centre market in Vietnam. This would be the first time a large U.S. technology company invests in Vietnam. Large data centers usually prefer to house their facilities in rival countries due to security concerns and the high operational costs.
Alibaba is a Chinese-owned company is also building data centers in Vietnam. This is in order to comply with local laws that require businesses to store local information. It is currently using data centers operated by telecommunications firms Viettel and VNPT to meet the requirement.
Ho Chi Minh City, Hanoi and other cities are becoming hubs for cloud service providers. A number of international companies have made major investments in the region which include NTT, Edge Centres, and STT Global Data Centers (STT GDC).
Vietnam is an excellent option for businesses that are seeking to invest in data centres. The large number of workers, competitive pricing when compared to other countries and supportive government policies make it a great place to do so. As the market expands, players must understand the risks and rewards to maximize their return.
Data centers require a lot of energy to keep up with the growing demand, it’s essential for service providers to have the right infrastructure in place. This includes ensuring a reliable and robust power supply, ensuring that the data storage environment is secure, and offering secure connections. These concerns can be overcome with the proper plan and execution, but they should be carefully considered against the potential benefits investing in this expanding sector could bring. For instance a data center with 50 megawatts of capacity can cost between $300 million and $650 million to construct in Vietnam. This is a significant portion of any company’s IT budget It is crucial to weigh the advantages and disadvantages of the investment prior to making the final decision. Contact us for assistance with your data center project.