Data centers in Vietnam are experiencing a boom as the economy improves and more companies adopt technology to streamline their operations. The industry is just beginning to develop, and infrastructure must be built quickly to meet the demands. It’s also vital for service providers to ensure stable power supplies and have a good knowledge of the nation’s complicated regulatory framework.
Until recently, the country had strict rules on foreign ownership of data and cloud businesses, but that changed last week. The new Law on Telecommunications eliminated the 49% limit for foreign ownership and allowed the full ownership of data as well as cloud companies by foreign investors. This is a positive change for the industry, since it could encourage foreign investment and boost the country’s tech capabilities.
One company benefiting from the policy shift is Google and is currently weighing the possibility of building a “hyperscale” data center near Ho Chi Minh City, one source familiar with the plans told. The venture however, which the source did not specify in terms of the size, could be a significant boost to the data center market in Vietnam. This would be the first time that a large U.S. technology company invests in the country. Large data centers typically prefer to have their facilities in other countries because of security concerns and the high operational costs.
China’s Alibaba is another company that is currently building data centers in Vietnam to comply with local laws requiring companies to store local data. Alibaba currently operates data centers that are owned by telecommunications companies Viettel and VNPT to meet the requirement.
Ho Chi Minh City, Hanoi and other cities are becoming hubs for cloud service providers. Many international companies, including NTT Global Data Centers, Edge Centres and STT Global Data Centers have invested heavily in the region.
Vietnam is an excellent option for companies looking to invest in data centers. Its huge workforce and competitive pricing when contrasted with other countries, and favorable government policies make it a fantastic place to do so. But as the market expands in importance, it’s important that businesses be aware of the risks and benefits of this lucrative industry in order to maximize their returns.
Data centers consume a lot of energy. To meet the growing demand, providers must have the right infrastructure. This includes providing a reliable and durable power supply, assuring that the environment for data storage is secure, and providing secure connections. While these concerns can be addressed with proper planning and execution, they should be weighed carefully against the potential rewards of investing in this growing sector. For instance the cost of a data center that has 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 is important to weigh the pros and the negatives before making a final decision. Contact us if you require assistance with your data center project.