Data centers in Vietnam are experiencing a boom as the economy grows and more businesses adopt technology to simplify their operations. But the sector is still just beginning to develop and infrastructure has to scale up quickly to meet the demand. It is essential that the providers provide uninterrupted power supply, and are aware of the complicated regulatory environment of the country.
Until recently, the country had strict rules regarding foreign ownership of cloud and data companies, but that changed this week. The new Law on Telecommunications eliminated the restriction of 49% for foreign ownership, and allows the full ownership of data and cloud businesses by investors from abroad. This is a welcome change for the industry, as it is likely to boost foreign investment and increase the nation’s technological capabilities.
Google is one company which is profiting from this policy shift. A source familiar with the plans has told me that Google is looking into an “hyperscaled” data center near Ho Chi Minh City. The source did not provide the amount of the investment. It would be an important boost to the data center industry in Vietnam. It would be the first time a large U.S. tech company made an investment in Vietnam, since large data centers typically prefer to build their facilities in rival nations due to security concerns and the high operating costs.
Alibaba, a subsidiary of China Alibaba is another company building data centers in Vietnam in order to comply with local laws that require companies to store local data. It currently uses data centers owned 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. Many international operators have made major investments in the region including NTT, Edge Centres, and STT Global Data Centers (STT GDC).
Vietnam is a great option for businesses that are planning to invest in data centres. The large number of workers, competitive pricing when as compared to other nations and favorable government policies make it a fantastic place to invest in data centres. As the market grows and players are required to understand the risks and rewards to maximize their return.
Data centers use a lot of energy and to keep pace with increasing demand, it’s essential for service providers to have the appropriate infrastructure in place. This includes providing a reliable and durable power supply, assuring that the data storage environment is secure, and providing secure connections. These issues can be resolved by the right planning and execution, but they should be carefully considered against the potential rewards that investing in this sector could bring. In Vietnam for instance the cost of building the data center of 50 megawatts could vary from $300 million to $650 million. This is a large portion of a company’s IT budget. It’s important to weigh the pros and negatives before making a final decision. If you need help with your data center project, get in touch with us for more information.