Combining global presence with local expertise
Bruno Lopez runs ST Telemedia’s Global Data Centres. He tells Natalie Bannerman about the company’s position as major cross-content player in the data centre market and the next opportunities for expansion
The company Bruno Lopez runs manages a portfolio of more than 60 data centres around the world – both directly and actively through joint ventures. With a presence in key business markets including Singapore, China, India and the UK, it is well placed to bridge the divide between east and west. Headquartered in Singapore, ST Telemedia Global Data Centres (STT GDC) is owned by parent company ST Telemedia, backed by Temasek Holdings.
Lopez says that there are seven key differences between the Asian and European markets, all of which are directly linked to data centre growth in these regions.
The first he says is the different conditions of the data centre markets: “Asia is less homogenous as compared to Europe. Some Asian markets are still in a nascent development stage, lacking high-quality capacity offerings. Because of this, businesses across Asia remain under-served as compared to Europe.”
Talent is another factor and Lopez says that there is a real lack of quality experienced data centre professionals in Asia. In Europe, because it is more developed, “there is greater depth in the talent pool”.
When it comes to wholesale versus retail colocation, Lopez says both regions have a similar pattern, with wholesale colocation concentrated in the key hubs, such as Singapore and Mumbai in Asia, and London and Frankfurt in Europe.
As for the quality of existing inventory in the two regions, Lopez says there’s a significant difference. “Some of the older colocation facilities in Asia have significant challenges – as they aren’t purpose-built facilities,” he explains.
Asia takes the lead over Europe in terms of telecoms infrastructure – as countries such as China and Japan rapidly pushing 5G initiatives. With 5G networks expected to play a large role in the adoption of the internet of things (IoT), Lopez expects Asia to lead the charge on this front.
Both China and India have over a billion people and a significant number of them are yet to engage digitally, meaning that the demographic conditions in Asia are stronger. Lopez adds: “Massive markets like Indonesia [are also] growing rapidly.”
Interestingly it is the established regulatory frameworks like the European Union’s General Data Protection Regulation (GDPR) that Lopez views as an advantage for Europe over Asia.
“Asia’s regulatory frameworks are more fragmented,” he says. “This creates more challenges for firms as they have to deal with multiple standards of compliance and rule of law, especially when managing several Asian markets. The varied cultural norms and languages further make Asia a more complicated region for companies to navigate.”
Nevertheless, as STT GDC crosses the border between these two regions, it is uniquely placed to help European multinational companies looking enter into Asia.
“As our home market, Singapore is fast-tracking to become Asia’s digital capital. The country’s digital ecosystem provides ample opportunities for businesses to access new markets across the Asia-Pacific region,” he says.
Each of STT GDC’s facilities in Singapore, India, China and the UK are led by local teams with extensive knowledge of the local industry standards and regulations. Lopez says that the company’s understanding of the complex Asian landscape provides “the value-add that customers often look out for when they venture into unfamiliar markets”.
July saw the launch of STT GDC’s VIRTUS data centres in Stockley Park, London’s largest data campus. VIRTUS LONDON5 and LONDON6 are the first two data centres to open on the campus, delivering 40MW of IT capacity between them bringing the company’s total IT load capacity in the London area to 90MW. With plans for another 25MW at LONDON7 on the Stockley Park campus well under way, this will bring the total VIRTUS London portfolio to 115MW.
Lopez says that London experienced a record year of growth last year and that STT GDC sees this upward trend continuing, “despite headwinds in the macroeconomic environment– such as Brexit”.
Since the integration of VIRTUS into the STT GDC portfolio, he says “there has been a great deal of knowledge sharing through our active engagement at the board and the executive council, the global alliance framework and operational and technical level.”
Lopez claims that VIRTUS’s continued expansion is due, in part, to the increasing rate of growth in enterprise cloud adoption, with VIRTUS becoming home to major public clouds as well as enterprise private clouds in London.
Across its other regions, the company recently announced the expansion of its STT Defu 1 data centre in Singapore with STT Defu 2. In India and China, Lopez says that data centre demand is growing rapidly with demand “far outpacing supply”. In India, the highest demand is mainly in the key economic cities such as Mumbai, Delhi, Chennai, Pune and Bangalore.
“Data consumption in India is growing at a frenetic pace. In fact, India is outpacing even the most developed economies in terms of growth in data,” he says. “Cloud adoption by enterprises at scale and digitisation are leading factors for this surge in data generation and consumption. This has led to an unprecedented focus and demand for efficient, reliable and scalable data centres in India.”
To meet this demand Lopez says that STT GDC expects to more than double its capacity in the next 18-24 months.
Nevertheless, STT GDC is continuously evaluating new markets, with particular focus on locations its customers are planning to go. Because of this, the company has recently announced a joint venture with TICON, a Thai developer and industrial property company, to make inroads into Thailand’s data centre market by building its first data centre facility in Bangkok.
From a wholesale perspective, Lopez says that STT GDC ensures that its designs meet the market requirements – by having an underlying building design that is flexible enough to meet the diverse demands as solutions in this space are bespoke to specific customers.
“Through our partnerships with telco operators such as StarHub, ViewQwest and Tata Communications, we have expanded our connectivity solutions service portfolio to include metro connectivity solutions,” he says. “We have also partnered with several internet exchange operators across all markets. This includes our recent partnership with the Singapore Internet Exchange (SGIX) earlier in July and the Mumbai-IX, which is powered by DE-CIX. In total, we have established points of presence in over 16 major business markets.”
On the enterprise side, particularly in Singapore, Lopez says: “We are seeing the shift from a retail-focused market to a wholesale-driven one, predominately led by the major cloud service providers. The increase in colocation space can also be attributed to the rise in enterprises transitioning from their own data centres to colocation facilities or directly to the cloud via major service providers.”
He explains: “Business leaders are shifting from a capital expenditure model to an operational expenditure one, as owned and operated data centres typically incur higher costs when under-utilised. Colocation facilities on the other hand offer lower costs of connectivity.”
The company believes that cloud computing is the main driver of growth for the data centre industry, he says, because of its ability to make organisations rethink their approach to IT. The rise of enterprises adopting hybrid solutions, such as both colocation and cloud, for their digital transformation goals contributes to the growth of the booming data centre industry, he says.
“While enterprises may be enticed by the vast number of emerging technologies entering the typical workplace such as artificial intelligence and the IoT, they need to take a step back, rely on tested and proven solutions like the cloud, and adopt a holistic approach in completing their digital transformation journey,” says Lopez.
Looking ahead at future expansion plans, Lopez says “we are constantly on the lookout for new markets to enter to support the rapid growth of our customers particularly in Asia.” He says this Asia First approach is due to the increasing rate at which Asia is expanding. According to PricewaterhouseCoopers, the Asia Pacific data centre services market is expected to grow 27% a year to support this massive surge in data demands and it is expected to exceed the European market by 2021.
“There are also massive opportunities for us in this region with countries like Indonesia growing at an impressive compound annual growth rate of 35%,” continues Lopez. This makes them one of the fastest growing markets in the Asia Pacific region. “In regard to Europe, we will be focusing on the key markets in western Europe,” he notes.
The company will continue to expand its global and local presence with data centre investments, he says, listing data centre platform acquisitions, greenfield and brownfield development, single or multiple data centre asset acquisitions, and joint ventures with strategic partners.
Wherever’s next for the company, it carries with it the same vison and message that has brought it so far to date: “Global presence, local expertise.”