Vietnam's data center market to reach US$1.26 billion by 2030

March 25, 2024 | 03:39 pm GMT+7

The data center market in Vietnam is forecast to reach US$1.26 billion by 2030, with a compound annual growth rate of 10.8%, according to the latest report from Viettel IDC.

Vietnam's data center market to reach US$1.26 billion by 2030- Ảnh 1.

The global datacenter market is expected to reach nearly $321 billion by 2024, growing at an average annual rate of approximately 7.3%, according to the report.

The Asia-Pacific region is driving 19% of data center growth, with significant expansion in both primary and secondary markets, according to Hoang Van Ngoc, director of Viettel IDC, who spoke at the Data Center & Cloud Infrastructure Summit (DCCI Summit) 2024 in Hanoi on March 18. Developed countries such as South Korea, Japan, Australia and Singapore constitute the primary market, while Vietnam, the Philippines, Indonesia, Malaysia and Thailand make up the secondary market.

In recent years, however, there has been a noticeable shift from the primary market to the secondary market, he added.

Ngoc predicts that there will be a boom in the number of data centers in Vietnam, the Philippines, Indonesia, Malaysia and Thailand in the coming years.

Vietnam, a promising market, lags behind other countries in terms of size. Currently, Vietnam's datacenter market is only a small fraction of the size of Singapore, Malaysia, and Indonesia.

Looking at the past three years (from 2020 to 2022), the data center market in Indonesia and Malaysia has grown about six times, while Vietnam has grown only 1.5 times.

Despite the potential opportunities and market momentum, Vietnam remains relatively slow to grow compared to its regional peers.

Viettel IDC highlights several factors driving market development in Vietnam, including a sizeable pool of cost-effective labor, a substantial IT workforce, lower construction costs compared to other countries, a supportive regulatory framework, and government backing for  digital transformation  initiatives.

Four major domestic providers in Vietnam, such as Viettel, VNPT, FPT and CMC, hold approximately 97% of the market.

In April, Viettel will inaugurate a new data center in Hanoi's Hoa Lac Hi-tech Park with a capacity of 250 MW, sponsored by HSBC for achieving green and sustainable certifications, Ngoc said.

Currently, the Vietnamese group operates 13 data centers across the country, with a total capacity of 106 MW.

"According to the plan by 2030, we intend to build megacenters in Ho Chi Minh City and Hanoi, with an estimated total capacity of up to 450 MW. This is a big number, four to five times the current capacity," he added.

Meanwhile, Vietnam's cloud computing market size is only 58% of the Philippines' and 50% of Indonesia's, but it has the highest growth rate in the Southeast Asia region and ranks third in Asia.

The projected growth rate of Vietnam's cloud market in the next 5-10 years is expected to be around 19-20%. The estimated size of cloud computing services is expected to reach about $1.2 billion by 2030.

Viettel IDC report said that after a period of rapid development, the market is currently in a deceleration phase (2022-2023). This is a temporary trend, as enterprises and organizations prioritize cost optimization after migrating services to the cloud.

The report noted that the market will recover by the end of 2024 and return to growth in 2025-2026.

The Viettel IDC report also shows that the market share of both data center and cloud computing services is mostly dominated by foreign enterprises.

However, there are still opportunities for domestic companies, especially since the government and relevant ministries and sectors have issued clear regulatory policies on the use and protection of personal information.

According to a recent report by the Ministry of Information and Communications, the cloud market in Vietnam is expected to grow to $1.24 trillion by 2027, with a compound annual growth rate of 17.9%.