APAC enterprises are reducing their datacentre footprint

Sustainable moves

Another driver of this shift lies in the fact that consumers and corporations are becoming increasingly environmentally conscious, said Mark Smith, managing director of Digital Realty in Asia-Pacific.

A joint survey conducted by Digital Realty and Eco-Business, a publication focused on environmental, social, and governance (ESG) issues, found that 89% of respondents felt that sustainability would be an important consideration factor when selecting third-party datacentre providers by 2025.

“This means that datacentre providers will have to reassess their current strategies and balance sustainability concerns of consumers with the need for growth,” Smith said, adding that most companies don’t have the resources and expertise to run a highly efficient and sustainable datacentre.

Lockington noted that the increased scrutiny that businesses are set to face, as well as awareness on business impact on the environment, could be prompting a pivot to colocation facilities, which are now required to operate more sustainably and adhere to strict sustainability guidelines set by governments in markets such as Singapore.

Singapore became the first country in Southeast Asia to introduce a carbon price in 2019 when the government introduced a carbon tax, at S$5 per tonne of greenhouse gas emissions, to incentivise emissions reductions across all sectors and support the transition to a low-carbon economy.

Dan Pointon, group chief technology officer at STT GDC, noted, however, that carbon taxes have a “relatively small role” to play in the shift to colocation datacentres.

A large part of the company’s sales enquiries, he said, comes from enterprises and cloud service providers that are looking for a flexible and scalable infrastructure to address the “tremendous demands placed on infrastructure such as datacentres to meet increased digital expectations”.

That said, datacentres have come under scrutiny for their climate impact, with some countries such as Singapore imposing a two-year moratorium on new datacentre projects that was only lifted earlier this year.

Against this backdrop, colocation datacentre providers are sparing no effort to reduce their carbon footprint.

STT GDC, for example, has announced a group-wide decarbonisation strategy with a commitment to net carbon neutrality by 2030. Pointon said the company has been aggressively purchasing renewable power and has already achieved 43% renewable energy penetration across its global operations.

“Additionally, STT GDC has recently participated in a pilot auction of a portfolio of high-quality carbon credits hosted by Climate Impact Exchange [CIX] in Singapore. Through the auction, we have successfully secured 25,000 tons of carbon credits that will offset approximately 15% of the company’s emissions in Singapore,” he added.

Similarly, Equinix has committed to using 100% renewable energy globally, with its sustainability efforts resulting in “substantial positive social and environmental impacts”, said Lockington. “We are proud to have achieved 100% renewable energy usage in our Singapore datacentres.”

Digital Realty is also working with Singapore-based CoolestDC, a startup spun off from the National University of Singapore, to develop high-efficiency cooling solutions, to improve the long-term energy consumption and overall efficiency of datacentres.

‘Centres of data’

Despite the advantages of moving to colocation facilities, some organisations may still find a need to have their own datacentres. Warrilow said Australia’s largest telco, Telstra, for example, built a datacentre in Victoria six years ago, but recently sold it and immediately leased it back.

“That frees up the capital, which is appealing to businesses that don’t want to own a datacentre. But Telstra is going to have one through 2050 and they host a lot of their communications technology there as well, which makes them slightly different,” he said.

Warrilow said organisations that have to deal with latency issues, such as those in manufacturing, and data sovereignty requirements, such as those in healthcare, might also choose to run their own datacentres.

“It will be interesting to see if there’s a move back from hyperscalers to some sort of more national footprint as we all get a bit more nervous and a bit angry with each other around the world,” he quipped, adding that the use cases for organisations to run their own datacentres will not go away in the foreseeable future.

Meanwhile, some colocation datacentre providers are eyeing the opportunity in edge datacentres to meet the needs of companies that require low-latency performance.

“There’s a datacentre provider called Leading Edge Data Centres that is moving to provide just enough datacentre facilities across the east coast of Australia and in rural and non-metro areas for things like smart agriculture and even content delivery,” Warrilow said.

“They are taking a very modular approach that could potentially offer cloud capabilities, maybe on the scale of AWS Local Zones, with the ability to secure the facilities and offer multi-tenancy.

“We’re moving from datacentres to centres of data, more in the cloud, more on the edge, but you still need to, in most cases, connect them together,” he added.