Competition set to intensify

Competition set to intensify

Mr Wanchai foresees a continued demand for cloud services as businesses aim to reduce costs, streamline operations through increased automation, and accelerate digital transformation.
Mr Wanchai foresees a continued demand for cloud services as businesses aim to reduce costs, streamline operations through increased automation, and accelerate digital transformation.

Competition in Thailand's data centre and cloud service sectors is expected to intensify as several foreign data centre providers enter the market.

The Thailand Data Center Council (TDCC) has vowed to position Thailand as the premier data centre hub of Southeast Asia within three years.

Thailand is becoming an investment battleground for global cloud data centre operators from the US, Japan, China, Singapore, Malaysia, Australia and India.

According to the Board of Investment (BoI), NextDC, an Australian data centre operator, received BoI approval for a 13.7-billion-baht investment in a new hyperscale data centre which will be located in Bangkok.

Thai trade representative Nalinee Taveesin earlier disclosed that CtrlS Datacenters, Asia's leading data centre operator, has leased a land plot of land in the Eastern Economic Corridor of Digital (EECd) in Chon Buri for a period of 50 years for the establishment of its hyperscale data centre.

According to BoI, CtrlS Datacentres (Thailand) Co received BoI approval for a 5-billion-baht investment in the new hyperscale data centre.

Morakot Kultumyothin, president of the Thai Internet and Cloud Service Provider Association, said this year the association would call for greater participation of its members to increase their competiveness and collaborate to promote the industry.

The association has 17 members, the majority of which are Thai-owned service providers.

"In the past three years, we expanded our objective not just to represent internet providers but also cloud providers," said Ms Morakot.

PRICE WAR

Wanchai Vach-shevadumrong, deputy managing director of local major data centre operator Internet Thailand (INET), said that amid the intense competition, there are still hidden opportunities as it is necessary for enterprises to utilise multi-cloud providers to minimise risk and establish backup disaster recovery sites for their data.

Mr Wanchai foresees a continued demand for cloud services as businesses aim to reduce costs, streamline operations through increased automation, and accelerate digital transformation.

He added that the company faces a price war due to the emergence of new foreign cloud service providers as well as the existing local providers.

He added that INET is focusing more on premium customers and is offering them a cloud service bundled with a cybersecurity service.

An IT source who requested anonymity said there is price-cutting going on in the cloud service market in an effort to attract cost-sensitive customers.

The new market entrants are also headhunting experienced senior executives in the industry to lead their operations, with the aim of quickly gaining new customers, the source added.

In a related matter, the TDCC recently appointed Thosaphol Pengsom as its inaugural chairman.

Mr Thosaphol has previously served in many major roles such as vice-minister for the Office of the Prime Minister, vice-president of the Energy Ministry, and chairman of the National Big Data Institute.

The TDCC's five founding members jointly established the council in January 2024, aiming to elevate the data centre sector, positioning it as a critical industry for Thailand's digital infrastructure.

The five founding members of the TDCC are: Malaysian-based AIMS Data Centre (Thailand); Evolution DC (Thailand), a joint venture between Singaporean Evolution Data Centres and Thai property developer Central Pattana Plc; Japan's NTT Global Data Centers (Thailand); STT GDC Thailand (Singapore's ST Telemedia Global Data Centres [Thailand]); and Japan-based Telehouse (Thailand).

Mr Thosaphol said while major cloud service providers like Alibaba Cloud, Huawei Cloud, Tencent Cloud, Amazon Web Services, and Google Cloud Platform have entered Thailand, fostering and supporting an environment that accelerates the expansion of their data centre capacity is imperative.

As of 2023, the APAC data centre co-location market supported 10,233 megawatts of IT capacity, constituting roughly 40% of the global market. Projected estimates by Structure Research forecast this capacity to surge to 19,069MW by 2028, according to the TDCC.

While Malaysia and Indonesia have experienced substantial growth, Thailand, despite having the second-largest GDP in the region, faces challenges in terms of policies and regulations, posing a risk to its participation in the burgeoning artificial intelligence (AI) economy, according to the TDCC.

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