In late 2011, Singapore was barely on my radar when it came to scalable infrastructure hosting. My team was furiously preparing to launch over a dozen e-commerce sites (with strange names like Lazada, Zalora, Zamoda, Zomi, and Zilandi) across the Asia Pacific. I decided then that Hong Kong was the best and most “logical” choice for hosting all of these Rocket properties.

Fast forward to 2020, the scene has flipped significantly, with the demand for data centers skyrocketing in Singapore, and clearly the government is on to this. According to a Business Times article, the government has put an abrupt halt on any new data centers from popping up. Their reasoning makes sense: data centers pollute through voracious consumption of power, take up precious square footage, and house the private info of millions (billions?) of users, so let’s work with industry giants on finding a more sustainable way forward.

Everyone loves Singapore 

So why is Singapore dealing with this issue only now? It’s no secret that the major players like Amazon, Microsoft and Google identified Singapore early on as the prime Southeast Asian spot to touch down and set up shop. It’s socially safe and stable, with world-class infrastructure and connectivity, and perhaps most importantly, is a global benchmark for business-friendly regulations (contrast this to what’s going on in Hong Kong recently.)

This appeal goes beyond local, and even regional. Global-juggernaut TikTok has tried to position itself as a leader in data privacy and security by storing its data in the US and Singapore. It’s become a no-brainer for global companies targeting Asia Pacific to store their production data in the country – unless as required by data sovereignty laws of their respective countries (for years, Indonesia was one of these countries, but they loosened up about a year ago.)

However, Singapore, as a tiny city-state, only has 725 sq km of (expensive!) land. In addition, its tropical climate means more energy is required to provide the right temperature and humidity-levels required by data centers. 

If Iron Mountain’s data is right, 60 data centers currently operate in Singapore, consuming a ton of power. Not that there’s a near-term shortage of cleanish power in Singapore, but at this rate, the question is how unrestrained-growth in DCs could impact the island city-state and its neighbors. Sure, natural gas is 50-60% lower in CO2 emissions than traditional coal-burning plants, but it’s not zero.  

Unstoppable demand

Each year, I hear more and more corporates giving up on operating what’s effectively an inferior in-house “AWS” and migrating to the cloud. They’re increasingly accepting that while digital and data should be a core competence, running server infrastructure does not need to be. It was probably with a huge sigh of relief that, just a year ago, Singaporean banks got the go-ahead to shift to the cloud. 

Besides, finding and keeping sufficiently capable system and network infrastructure engineers is becoming more and more difficult. So it’s no surprise that enterprise cloud adoption is going to continue skyrocketing. 

Then there’s the massive direct consumer demand for cloud storage (yep, for all those gigs of HDR photo albums and 4K videos you take with your iPhone, etc.), and the imminent roll out of 5G (imagine all the data that is collected and analysed by self-driving cars). Crypto-mining, and more nefariously crypto-jacking, will continue to take its (illegal?) share of total cloud computing energy consumption.

Other countries in the region, especially Indonesia, are quickly becoming cloud infrastructure hotspots as big names such as Alicloud, AWS and Azure have built or are building facilities there where regulations appear to be non-existent. 

On the one hand, I hope they do it sustainably right from the start. On the other hand, as a crazy heavy user of the AWS Singapore Availability Zone, I’ve been waiting hella long for Indonesia to get proper cloud infrastructure going (sorry Alicloud). After almost a decade of launching platforms and scaling up for my Indonesia ventures and clients, we’re still in Singapore DCs along with all the cross-border, high-latency-fun that goes with it.

Although we’re seeing a few DC players in the region taking on the issue of sustainability directly, it’s been spotty. So it’s great to see Singapore taking the lead in this at the highest level, before 5G and the unstoppable inertia of digital-everything pushes data centers’ impact to unmanageable depths. 

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.

 

Previous articleWhatsApp Pay finally unshackled in India, or is it?
Next articleWhich VC in Southeast Asia is the most loved?
Sean has been designing and building enterprise and consumer internet technology platforms internationally for over two decades. As a serial entrepreneur and chief technologist originally from the US, Sean has been a significant contributor to the creation of over $6 billion in tech-venture value in the Asia-Pacific over the past 8 years. His Airbnb-style startup, Airizu, was China’s first national-scale, sharing-economy marketplace that pioneered the disruptive business model and sparked the rise of O2O throughout the region including future unicorn, Tujia. As Managing Director and CTO at Rocket Internet in China, Sean built a tech development powerhouse that launched and supported dozens of fast-scaling Internet ventures globally, including the Southeast Asia market leaders Lazada and Zalora. Sean was an EE and CS major at the University of Illinois at Urbana-Champaign.

LEAVE A REPLY

Please enter your comment!
Please enter your name here