As the economy grows and more companies adopt new technologies to streamline operations and improve efficiency, data centers in Vietnam are seeing a surge. However, the sector is in its infancy and infrastructure must expand quickly to meet the demand. It’s also vital for service companies to ensure reliable energy supply and have good knowledge of the nation’s complicated regulatory framework.
The country had strict rules on foreign ownership of data and cloud companies, but that changed last week. The new Law on Telecommunications has eliminated the cap of 49% for foreign ownership. This allows international investors to control all cloud and data businesses. This is a positive change for the sector, as it is likely to boost foreign investment and increase the nation’s technological capabilities.
Google is one company that is taking advantage of this policy shift. A source familiar with these plans has said that Google is looking into a “hyperscaled” data center near Ho Chi Minh City. The investment which the source did not define in terms size, would be a major increase for the data center market in Vietnam. It would mark the first time that a major U.S. tech company invested in Vietnam, as large data centers tend to prefer to locate their facilities in rival nations due to security concerns and high operating costs.
Alibaba, a subsidiary of China Alibaba is another company that is building data centers in Vietnam to comply with local laws requiring companies to store local data. To comply with this requirement, Alibaba currently has data centers owned by telecommunications companies Viettel and VNPT.
The country is a prime location for cloud service providers, with Ho Chi Minh City and Hanoi both becoming thriving data center hubs. Many international operators have invested massively in the region which include NTT, Edge Centres, and STT Global Data Centers (STT GDC).
With its huge workforce, competitive pricing when compared to other countries, and its supportive government policies, Vietnam is a good choice for companies planning to invest in data centers. As the market expands, companies must be aware of the risks and rewards to maximize their return.
Data centers use a lot energy. To keep up with the increasing demand, providers need to have the right infrastructure. This includes having a sturdy and reliable power supply, ensuring that the environment is safe for data storage, and providing secure connectivity. Although these issues can be addressed with right planning and execution, they should be carefully considered against the potential rewards of investing in this growing business. For example a data center with 50 megawatts of power could cost between $300 million and $650 million to construct in Vietnam. This is a large portion of an organization’s IT budget. It’s important to weigh the pros and cons before making a decision. Contact us if you need assistance with your data center project.