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Inside the rise of ST Telemedia Global Data Centres

A blended strategy of building and acquiring datacentres, as well as forming local partnerships, has contributed to the rapid rise of one of the fastest-growing datacentre providers in Asia

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As one of the world’s fastest-growing datacentre providers, ST Telemedia Global Data Centres (STT GDC) has been making itself known in the market in recent years for its aggressive expansion plans, particularly in the Asia-Pacific (APAC) region.

At its home turf in Singapore, the company claims to have grown more quickly than any other provider in the market over the past two years, building and operating its own facilities to meet customer demand, according to its group CEO Bruno Lopez.

It recently announced the expansion of its STT Defu 1 datacentre with STT Defu 2, a new facility that provides additional capacity in the Defu Industrial Estate, an area in the north-eastern part of Singapore.

Building its own datacentres, however, is just part of its expansion playbook that also includes acquiring datacentres and teaming up with local players when entering new markets.

In 2014, STT GDC acquired a 42% stake in GDS, a major datacentre provider in China. “We supported its explosive growth, helping to prepare for its listing on the Nasdaq in November 2016. We continue to maintain our position in GDS as the largest shareholder after the listing, hence demonstrating our commitment as a long-term strategic investor in GDS,” said Lopez.

In India, it bought a 74% stake in Tata Communications Data Centres, with Tata Communications remaining as the other shareholder of its datacentre business in India and Singapore. The India datacentre business has been rebranded as STT GDC India, now India’s leading datacentre operator.

Elsewhere in Southeast Asia, STT GDC recently formed a strategic partnership with Ticon, which is majority owned by Frasers Property and TCC Group, to build its first datacentre facility in a strategic location in Bangkok.

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Beyond the shores of Asia, STT GDC acquired a 49% stake in Virtus in the UK in 2015, and bought out majority private equity partner Brockton Capital fully in 2017.

“When venturing into new markets, we look for strong local partners with an impeccable track record and one that shares our all-important customer service ethos,” said Lopez.

Growth drivers

The rise of STT GDC, which boasts a global footprint of over 60 datacentres, mirrors that of the datacentre industry.

According to Frost and Sullivan, the APAC datacentre services market raked in $14.1bn in revenue in 2016, representing a growth of 15.3% over 2015. The market will grow at a compound annual growth rate of 14.7% from 2015 to 2022 to reach nearly $32bn at the end of 2022.

Lopez attributed that growth to digital transformation initiatives undertaken by both enterprises and governments across the region.

“Governments and businesses are leveraging digital technologies to provide services and applications and increase operational efficiency. As they embrace digital transformation initiatives, they are demanding more datacentre capacity, storage and compute capability; transforming their IT deployment into an agile, modern datacentre,” he said.

Hyperscale cloud suppliers

Adding to the demand for datacentre services are hyperscale cloud suppliers as more enterprises turn to cloud computing to lower costs and improve operational efficiency.

Citing research by Cisco, Lopez said hyperscale data centres will house 47% of servers globally by 2020. Around 70 hyperscale datacentres are also being planned for deployment across APAC over the next three years. 

The move from 4G to 5G mobile infrastructure will also enable users to consume digital content, especially video, at much faster speeds. Lopez said this requires additional infrastructure and capacity to meet customers’ expectations, further fuelling demand for datacentre services.

Finally, changes in the regulatory environment are also driving growth, he said, noting that many governments are calling for stricter privacy rights and data sovereignty requirements, translating to increased demand for local datacentre facilities.

“While this practice has been fairly common practice in some customer verticals such as finance for many years, it is now becoming more commonplace in consumer applications,” said Lopez.

Green datacentres

STT GDC’s growth strategy is not one of growing at all costs, including the impact on the environment. Research already suggests that datacentres could become one of the planet’s biggest energy consumers, using as much as 20% of all available electricity in the world by 2025.

“Energy efficiency is a big concern for us at STT GDC,” said Lopez. “We view the challenge through a number of different lenses, right from construction of the datacentre through to operational processes and their impact on power usage.”

For example, during the construction phase, the company looks at construction methods, system components and operational procedures, among other things, for ways to reduce energy usage while maintaining high levels of reliability and availability.

“When selecting equipment to be used across our facilities, we carefully select equipment that utilises power in a highly efficient manner, such as choosing low-loss transformers or implementing a modular uninterruptible power system to achieve scalability,” said Lopez. “We also ensure regular upkeep of mechanical and electrical equipment so that we are always operating at our maximum potential.”

In addition, hundreds of wireless temperature and static pressure sensors are installed at STT GDC’s facilities to monitor temperature fluctuations in the rack, and to deliver cooling – which can account for up to 49% of a typical datacentre’s operating expenditure – to where it is needed.

“Our chilled water plant has been designed to allow for scalable cooling capacity, allowing chillers to be added in phases to meet the cooling loads,”  said Lopez. “These chillers are carefully selected to operate efficiently at partial loads, rather than the traditional method of selecting chillers based on full-load efficiency.”

Large datacentres have room to grow

Although some industry observers have claimed that the days of massive datacentres are over, with edge datacentres expected to handle more data processing at the edge of the network to support applications like the internet of things, Lopez believes datacentre demand will continue to grow in tandem with edge and large datacentre requirements.

Edge computing will definitely drive additional demand for modern datacentre capacity across many more markets, given that applications that are deployed on the edge require significant compute and storage infrastructure,” he said. “For example, industry 4.0, autonomous vehicles and 5G services all require robust datacentre facilities to store and compute data gathered.

“This, is in line with the trend we are seeing across all our markets, is that larger datacentres are being required to accommodate the demand growth brought on by the rise of cloud services, digital content and enterprises undergoing digital transformation.”

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