Malaysia data center market to grow at a CAGR of 15.72% from 2021 to 2026, finds Technavio

The Malaysia data center market value is expected to increase by USD 2.08 billion from 2021 to 2026 progressing at a CAGR of 15.72%, reports Technavio Research. One of the main reasons for the growth in Malaysia’s data center market is the increase in demand from hyperscalers. This will positively impact the data center market in Malaysia.

Major trends in the Malaysia data center market

Shift to larger data centers: The data center market trend in Malaysia indicates a shift towards large data center facilities. In South-East Asian countries like Malaysia, land shortage and the high cost of land acquisition are prompting service providers to construct multistoried, high-capacity data center facilities.
Colocation service providers and CSPs also plan to build larger data center facilities with higher gross floor areas. Maintaining large data centers is a simpler task for service providers than managing multiple small data centers. Hence, the growing large data center facilities will drive the growth of the data center market in Malaysia during the forecast period.
Demand for hyperscalers: There have been increased investments in 5G testing and deployment in Malaysia due to growing data traffic and growing consumption of online video and audio content. This is driving the demand for upgrading the existing data center network infrastructure by hyperscalers and increasing the construction of edge data centers to reduce latency. The increasing expansion of data centers by hyperscalers will propel the data center market in Malaysia during the forecast period.

Major challenge

High capital investment: The requirement for high capital investment will be a key challenge for the data center market in Malaysia. The market here is seeing a lot of demand from businesses that are upgrading their IT infrastructure and moving to the cloud services. Many businesses are buying server configurations that can handle big data analytics, AI, and software-defined infrastructure. The adoption of next-generation technologies such as AI, IoT, and 5G, demand infrastructure to support the resulting exponential rise in data traffic. Stakeholders in the data center building and construction industry need to adhere to timelines and start operations as soon as possible. The time-to-market and capital cost will be the two key parameters for assessing the relevance and profitability of data centers.

Some of the key vendors in the Malaysia data center market are Cisco Systems Inc., Cummins Inc., Dell Technologies Inc., Eaton Corp. Plc, Fujitsu Ltd., Hewlett Packard Enterprise Co., Huawei Technologies Co. Ltd., Inspur Group, International Business Machines Corp., Legrand SA, Lenovo Group Ltd., NEC Corp., NetApp Inc., NTT Communications Corp., NTT Corp., Schneider Electric SE, Vertiv Holdings Co. They must focus on grabbing business opportunities from the data center servers’ segment as it accounted for the largest market share in the base year.

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Source: Technavio

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