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Singapore Sees Wholesale Data Center Pricing Decline

December 22, 2017

Singapore is a great place to be, particular if you have a data center.

It’s a tech industry hotspot. You can find a lot of submarine cable landings there. And the country is politically stable.

But things related to data center are starting to change there. Specifically, the balance has shifted in favor of wholesale data center leases as opposed to retail colocation arrangements.

At the same time, however, giant cloud providers like Alibaba and Amazon have been building enormous data centers in Singapore as opposed to leasing from wholesale providers.

“Together, Google, Amazon, Microsoft, IBM, Alibaba, and Tencent use 136MW of data center capacity in Singapore, only 30 percent of which they lease from wholesale providers…” reports DataCenter Knowledge. “Microsoft’s own data center in Singapore came online about two years ago; Google launched its first building in the island nation last year and second earlier this year; Amazon announced it will build a Singapore data center this year as well.”

That, the media outlet says, has lowered the cost of wholesale leases in Singapore. And it has slowed the construction of wholesale data centers.

“There’s been a roughly 15 to 20 percent wholesale pricing decline in Singapore over the last 12 to 24 months….” the report says. “The number of new construction projects by data center providers went from six in 2016 to two this year; three new builds have been announced for 2018.”

Here are some other trends, a reported this month by IDC:

Public cloud wins. In 2016, public cloud services accounted for 41% of all cloud-related spending. By 2021, this figure will increase to 48%. And, when spending on hardware and software that enables public cloud services, and managed and professional services around the cloud are included, these figures rise to 65% and 68%, respectively. 

• Services supporting public and hybrid cloud environments are hot. Spending on managed and professional services around cloud adoption are, collectively, the second largest opportunity in the whole cloud market, accounting for 31% of all cloud-related spending in 2016 and 2021. 

• Infrastructure for cloud services providers dominates. The hyperscale datacenters operated by cloud service providers are dramatically altering the market for infrastructure hardware and software. By 2021, cloud service providers will account for 76% of cloud-related infrastructure hardware and software spending.

Edited by Maurice Nagle

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