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As the economy expands and more businesses adopt new technologies to streamline their operations, data centers in Vietnam are experiencing a boom. However, the industry is in its infancy, and infrastructure needs to grow quickly to meet demand. It’s also vital for service providers to ensure stable power supply and to have a strong understanding of the country’s complex regulatory environment.
The country had strict regulations regarding foreign ownership of cloud and data businesses until last week. The new Law on Telecommunications has eliminated the 49% cap on foreign ownership. This allows foreign investors to control all cloud and data businesses. This is a good thing for the industry, since it is likely to encourage foreign investment and improve the country’s tech capabilities.
Google is one company that is taking advantage of this policy shift. A source close to the plans has revealed that Google is considering an “hyperscaled” data center in Ho Chi Minh City. The source did not disclose the size of the investment. It will be a major boost to the industry of data centers in Vietnam. This would be the first time an important U.S. technology company invests in the country. Data centers with large capacity typically prefer to locate their facilities in other countries because of security concerns and the high operational costs.
Alibaba, a subsidiary of China Alibaba is another company that is building data centers in Vietnam to ensure compliance with local laws that require companies to store local data. It currently has data centers owned by telecommunications companies Viettel and VNPT to meet the requirement.
Ho Chi Minh City, Hanoi and other cities are becoming hubs for cloud service providers. Numerous international companies have invested large sums in the region such as NTT, Edge Centres, and STT Global Data Centers (STT GDC).
Vietnam is a fantastic choice for companies planning to invest in data centers. The large number of workers and affordable prices when in comparison to other countries and the favorable policies of the government make it a fantastic place to do so. As the market grows, players must understand the risks and rewards to maximize the return.
Data centers use a lot energy. To keep up with the rising demand, companies need the right infrastructure. This includes providing a reliable and durable power supply, making sure that the data storage environment is secure, and offering secure connections. These issues can be resolved by the right planning and execution but they should be carefully weighed against the potential benefits that investing in this expanding sector could bring. In Vietnam for instance the cost to build the 50 megawatt data centers could be anywhere from $300 million to $650 million. This is a large portion of a company’s IT budget. It is essential to weigh both the pros and the cons before making a decision. Contact us for assistance with your data center project.
