Sailing the Digital Sea Lanes in Singapore

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Marina Bay, Singapore. Photo courtesy of Leonid Yaitsky.

Albert Einstein once said, “If you can’t explain it to a six year old, perhaps you don’t understand it well enough yourself.”

I remember that quote vividly because it came racing back to me a couple of years ago. I met with a visiting ex-Government minister for information, who was also a former naval officer, and was discussing why Singapore is such a great location for datacenters.

I started by telling him about the great things Equinix was doing by building world-class datacenters. At first he was having a trouble understanding what I meant by digital connectivity. But, when I produced a world map that showed all of the submarine data cables terminating in Singapore, he got it right away!

“Now I understand. You guys are the digital sea lanes,” he said.

Location, location, location

Singapore’s success has always depended as much on where it is as what it does. In the days of sailing ships, Singapore sat in the middle of the regional trade routes, making a living and adding value by managing the ebb and flow of the goods that passed through its port.

In today’s digital world, Singapore’s role isn’t that much different from its days as a trading center. Most of the major submarine cables follow the old shipping lanes, turning many of the world’s coastal cities into the digital equivalent of a trading port.

The majority of the submarine cables that move data from East to West – around 85% of them – pass through Singapore. So, if your business needs to distribute information across the world, then Singapore, offers all the connectivity you need in a single location.

Enterprises, and even neighbouring SEA countries, such as Vietnam, Thailand and the Philippines, have set up POPs (points of presence) in the city to take advantage of what has become a tremendously valuable new resource – connectivity density!

In fact, the digital sea lane isn’t a new trend. The first commercial submarine cable was laid across the English Channel in 1851, and during the next 50 years much of the world was cabled. A glance at a map produced by the Eastern Telegraph Company in 1901 shows that the connections closely follow the global sea trade routes of the day.

What is new is how the Singapore Government has nurtured this resource. Through the IDA (Infocomm Development Authority), it is actively promoting and positioning the city as a regional digital hub. The Government offers tax incentives to encourage more companies to set up regional headquarters in Singapore. That helps IT development as well, because enterprises tend to locate their datacenter’s close to their regional HQ.

There are even tax incentives for companies that re-site their regional IT hub to Singapore, and even more tax relief if they move the CIO position to Singapore. It’s a very entrepreneurial approach.

Industry excellence

The datacenter industry is also playing a role. For example, when Equinix plans a new datacenter, the criteria go way beyond price of real estate and reliable power. The key ingredient actually is connectivity, and Singapore is certainly well supplied in that regard.

When we set up our first datacenter – SG1 – back in 2000, our first step was to attract as many carriers, ISPs and submarine cable operators as possible to terminate their connections in our facility. Today, we have over 90% of the regional carriers co-located in our Singapore datacenters, creating by far the highest network density in South East Asia.

That makes it very easy for customers to connect to any carrier and any location in the world.

In fact, today we have two datacenters in Singapore, with the third and newest – SG3 – scheduled to open in Q1 2015. Housed in a brand new, purpose-built building, it features the latest, most-up-to-date technology, which is important, because technology changes so quickly. It also features increased physical security and other enhancements that bring it into line with the latest MAS (Monetary Authority of Singapore) regulations, making it ideal for serving the financial services industry.

Connectivity density is a tremendous competitive edge, for Singapore and for Equinix, and a broad variety of customers take full advantage of it. About 45% of our customers are network customers, carriers and ISPs themselves, while another 20% are content providers, such as search engines and social networks.

Financial services firms, enterprises and government clients account for 21%, while cloud and other IT service providers make up nearly a quarter of customers (24%).

Even the ocean is going digital

One such is DigitalOcean, a three year-old firm that provides cloud services to application developers all over the world.

Having grown its customer base to 200,000 within three years and with rising demand for its services in Asia-Pacific, DigitalOcean needed a way to scale rapidly. Deploying in Singapore enables the company to serve the international developer community, using Equinix as a gateway to Australia, India, Southeast Asia and Japan.

In fact, DigitalOcean is also deployed in Equinix datacenters in New York, Silicon Valley and Amsterdam – a truly global footprint that enables them to sail the digital sea lanes, just like Singapore has and will undoubtedly continue to do so very successfully.