Singapore Becomes APAC’s Data Centre Hub


The total addressable market size of data center and hosting services in Singapore, in terms of spending opportunity, is set to increase at a compound annual growth rate (CAGR) of 6.1% between 2020 and 2025, driven by rising adoption of cloud technology and shift towards remote working models across enterprises, forecasts GlobalData.

Saurabh Daga, Technology Analyst at GlobalData, comments: “The presence of large number of technology focused businesses, coupled with the government’s focus on adoption of cloud technology for disbursement of various public services will help drive data center and hosting spending in Singapore to reach US$2.1bn in 2025.”

Over the years, Singapore has transformed into a data center hub of the Asia-Pacific region, and a home to some of the global leading cloud service providers. Currently there are close to 100 data center facilities within Singapore which serve the local demand as well for the enterprises based out of other South East Asian countries.

Extremely high penetration of digital technologies within the local businesses, along with government-backed e-governance initiatives such as ‘Digital Society’ project under the Smart Nation initiative, are expected to bolster demand for data center and hosting solutions in the country, over the forecast period.

Between the data center and hosting segments, ‘application hosting & data center services’ and ‘colocation services’, enterprise spending on colocation services is set to grow at a faster CAGR of 8.3% over 2020-2025. However, the application hosting & data center services represent the larger market segment.

Daga adds: “Growth in the colocation services can be attributed to the rising focus on reducing IT spending on commissioning mission-critical data center facilities. Data center colocation offers scalability, security, and cost-effectiveness for managing data needs of enterprises. Furthermore, work-from-home and remote working trends in the aftermath of COVID-19 pandemic has also led to many of the country’s enterprises to turn towards colocation services to host their key applications to manage business continuity.”

Large power consumption by data center facilities has resulted in government altering data center development policies in the region. Subsequently, a moratorium on new data centers has been imposed until 2021 as the country focuses on the development of energy-efficient data center facilities in the country.

Daga concludes: “While the large (1,001-4,999 employees) and very large (5,000+ employees) enterprise segment will jointly account for largest share of the total data center and hosting spending in Singapore through the forecast period, the combined spending from micro (1-50 employees), small (51-250 employees) and medium (251-1000 employees) enterprises will increase at a marginally faster CAGR of 6.1% over the forecast period. Various digitization initiatives for SMEs such as SMEs Go Digital, Industry Digital Plan, Productivity Solutions Grant among others will be the key growth driver for spending on data center and hosting services by the SMEs in Singapore.”


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