Data centers in Vietnam are seeing an increase as the economy picks up and more businesses embrace technology to simplify their operations. But the sector is still just beginning to develop and infrastructure needs to increase its capacity quickly to meet the demand. It’s also essential for service providers to ensure reliable power supply and to have a an understanding of the country’s complex regulatory landscape.
The country had strict regulations regarding foreign ownership of cloud and data companies until last week. The new Law on Telecommunications has eliminated the 49% limit on foreign ownership. This permits international investors to control all cloud and data businesses. This is a great change for the industry, as it is likely to boost foreign investment and improve the nation’s technological capabilities.
Google is one company that is taking advantage of this policy shift. A source close to the plans has told me that Google is looking into an “hyperscaled” data center near Ho Chi Minh City. The venture which the source did not define in terms of size, would be a major boost for the data center market in Vietnam. This would be the first time the size of a major U.S. technology company invests in the country. Data centers with large capacity typically prefer to house their facilities in other countries due to security concerns and high operational costs.
China’s Alibaba is another company that is building data centers in Vietnam to meet local laws that require companies to store local data. To fulfill this requirement, Alibaba is currently using data centers owned by telecommunications companies Viettel and VNPT.
The country is a popular spot for cloud service providers and cloud service providers, with Ho Chi Minh City and Hanoi both emerging as vibrant data center hubs. Numerous international companies have made major investments in the region, including NTT, Edge Centres, and STT Global Data Centers (STT GDC).
Vietnam is a great option for companies seeking to invest in data centers. The large number of workers and affordable prices when as compared to other nations and a supportive government policy make it a perfect place to start. As the market grows, companies must be aware of the risks and rewards to maximize their return.
Data centers use a lot of energy and to keep pace with increasing demands, it’s vital that providers have the appropriate infrastructure in place. This includes providing a reliable and durable power supply, ensuring that the environment for data storage is secure, as well as providing secure connections. These concerns can be overcome with the proper planning and execution, but they should be carefully considered against the potential benefits that investing in this growing sector could bring. In Vietnam, for example the cost of building a 50 megawatt data center could vary from $300 million to $650 million. This is a large portion of an organization’s IT budget. It’s important to weigh the pros and the negatives before making a final decision. Contact us if you require assistance with your data center project.
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