4 Trends That Will Change the APAC Digital Landscape in 2023

The growing data appetite of Asia-Pacific has fueled the rapid development of cloud infrastructure across both established and emerging markets. Major metropolitan hubs across the region demanding greater data connectivity have driven Equinix to continuously increase the capacity of digital infrastructure. In 2022, we announced ME2 and SG5 expansions in Melbourne and Singapore, and new International Business Exchange^TM (IBX®) data centers in Tokyo (TY15) and Mumbai (MB3). Emerging markets like Indonesia and Malaysia are also growing their digital footprint, and have received significant investment as the market for digitization continues to develop at scale. Equinix has positioned itself to capture new opportunities in Indonesia and Malaysia with IBX data center projects in the pipeline. We opened our first hyperscale xScale^TM data center in Sydney designated SY9x, and initiated a new joint venture with GIC to develop two xScale data centers in Seoul.

“With great growth comes greater responsibility.” For every new project initiated, we are always keeping an eye on the rearview mirror to examine how we can exceed expectations, both in the context of sustainability and delivery. As 2023 peeks over the horizon, we’re committed to raising the benchmark for sustainable development that is built on the strength of existing standards and initiatives. We have detailed some of our previous Future First achievements in the Asia-Pacific in this blog.

Looking ahead, the shift towards an increasing number of devices in an increasingly integrated network environment raises the bar for cloud ecosystems along with the connectivity and automation solutions they can provide. New innovations focus on simultaneously achieving higher efficiency and sustainability, driven by cloud computing. We will be detailing our predictions for the next generation of data centers and how sustainability is intricately woven into the future of cloud computing.

Ambient Computing and 5G Lead the Transition to Everything Digital as a Service

The Internet of Things (IoT) revolution has silently grown through ambient computing, integrating technology seamlessly into the backdrop of daily life. With ambient computing, technology will become ubiquitous in our work and home environments. Device sensors constantly collecting data triggered by sight and sound, will allow artificial intelligence (AI) to make decisions without direct human intervention, eliminating decision friction while enhancing the human experience.

Exponential IoT spending in Asia-Pacific is forecast to reach $436 billion by 2026, with a compound annual growth rate (CAGR) of 11.8% for the period 2021-2026.[1] Through 5G, new achievements in machine-type communications, ultra-low latency and mobile edge computing can be achieved to improve customer experience and create new revenue streams. Enhanced interconnection capacity will be the underlying technology to allow sensors, devices and gateways to collect, analyze and communicate data in a strengthened network. Robust connectivity at the edge will become key to ensuring the pipeline of data transfer, analysis and storage is sufficient to power the new era of a smart future.

The global infrastructure edge footprint is forecast to reach 40 gigawatts, with 63% supporting healthcare, manufacturing, energy, retail and transportation by 2028.[2] As the edge footprint grows with the adoption of 5G, demand for data and digital as a service continues to increase as legacy enterprises across industries begin their transition to digital. Digital services like Equinix Network Edge will enable businesses across multiple industries to transform their network and deploy digital-ready infrastructure at the edge with ease. Further reduction in complexity, cost and management strain helps businesses set up highly available applications at closer proximity to customers, employees, partners and ecosystems.

Digital Supply Chains Spur Industry 5.0 Onwards

The goal of the next-generation digital supply chain is ambitious: to build an altogether new kind of supply network that’s both resilient and responsive. Companies with highly digitized supply chains and operations can expect efficiency gains of 4.1% annually while boosting revenue by 2.9%.[3] Potential for disruption remains high in the current economic climate; sudden shifts in demand, lack of raw materials, and natural disasters can wreak havoc on even the best-laid supply chain plans.

To mitigate these risks, businesses have been working tirelessly to transform their supply chain. Continued digitization of supply chains will accelerate the pace towards Industry 5.0 where efficiency and productivity can be truly optimized with human-robot collaboration. This means hyper-connectivity and automation are essential in the ecosystem for Industry 5.0. Platform Equinix® is designed to connect all stakeholders including suppliers, manufacturers, logistics, warehouses and customers on a single platform to facilitate seamless communication and form a resilient ecosystem that is less susceptible to supply chain shocks.

Digital Twins: Moving Beyond Automation Into Sustainability

The industry size for digital twins in Asia-Pacific reached $1 billion in 2019 and will register a 35% CAGR up to 2026 owing to the rise in government initiatives for the development of IoT infrastructure and smart cities. Optimizing operations is not the only benefit that digital twins bring. Digital twins are also enabling businesses to achieve their ESG (Environment, Sustainability, Governance) goals.

Digital twins are changing the way new sustainable data center designs are being created, leading to faster inception and greater iterations than ever before. Equinix engineers collaborated with partners to create a digital twin of a data center 3D model with variations based on differing capacities, equipment densities and cooling system paths. This centralized digital twin platform allows engineers to predict the impact of proposed changes based on live feedback from the data center’s digital twin. Engineers could quickly pinpoint and suggest the adjustments needed to improve a design based on forecasted efficiency boosts and projected energy consumption in real-time.

Leveraging digital twins, businesses are now reinventing the way they measure energy consumption and emissions. This enables them to simulate multi-factor scenarios, and ascertain the best approach to reaching sustainability goals, increasing their speed of time-to-market while reducing the risks associated with complex projects.

Environmental Stewardship and The Data Centers of the Future

Amid an uncertain economic environment, some companies, especially small and medium enterprises (SMEs), are delaying investments in sustainability and prioritizing costs perceived to be more directly contributing to revenue growth. Greater awareness on the benefits of digitization paired with sustainability would spur SMEs to invest more confidently into initiatives like colocation facilities, which operate more efficiently. At the same time, renewable energy investments and other sustainability features adopted by data center providers can help companies achieve their sustainable energy goals and lower their overall carbon footprint. By taking a proactive stance on sustainability, Equinix realizes real value; data center systems that operate more efficiently, using renewable resources, while maximizing physical footprint and energy. We will continue to lead by example, fostering an inclusive network of partners and customers that are committed to sustainability.

Sustainability remains a core focus moving forward, where data centers must concurrently mitigate the effects of climate change while striving towards carbon neutrality. Digital twins, while traditionally relevant to manufacturing, are helping to solve sustainability issues, aiding in rapid turnover for future data center designs that meet ESG criteria. Finite land, water and energy resources on our planet have spurred forward-looking innovations to solve our planetary constraints.

5G development continues to drive the digitization of supply chains, creating automation solutions that move us closer to Industry 5.0. Digital ecosystems must host the frameworks to sustain next-generation connectivity and network stability. Organizations must remain cognizant of the need for backwards compatibility of 3G and 4G using network software as consumer adoption of new technology inevitably lags.

Equinix wholeheartedly wishes a prosperous new year to all our partners and associates as a new chapter unfolds heading into 2023. The best way to predict the future is to create it, and we believe that the spirit of collaboration will lead to innovative and sustainable outcomes for us all.

[1] https://www.idc.com/getdoc.jsp?containerId=prAP49284322

[2] https://www.equinix.co.uk/content/dam/eqxcorp/en_us/documents/insights/eqix_gxi_2023_en.pdf

[3] https://www.pwc.ch/en/publications/2017/how-digitization-makes-the-supply-chain-more-efficient-pwc-2016.pdf