Unleash the Power of Data and Services by Connecting Southeast Asia for Economic Empowerment

Building agile digital infrastructure to integrate enterprises with interconnected ecosystems and economies

Rajaneesh Kurup
Unleash the Power of Data and Services by Connecting Southeast Asia for Economic Empowerment

The digital landscape in Southeast Asia is experiencing an unparalleled surge in growth. The region’s rapid digital transformation is evident, with notable tech “unicorn” companies leading the charge, alongside a wave of innovative entrepreneurs and small firms harnessing technology to fuel their growth.  Major cities are witnessing the ubiquitous use of mobile phones for messaging and social media, while ride-sharing services and delivery apps are revolutionizing urban transportation and services. Consumers are increasingly turning to online platforms to make purchases, redefining the future of traditional retail.

These cumulative contributing factors are driving a high level of interest from the region’s governments for faster and more inclusive digitalization. As the worst impacts of the global health and economic crisis recede, foreign direct investment inflows into Micro, Small and Medium Enterprises (MSMEs) have also rebounded to reflect the attractiveness of the region’s economy for investors worldwide as they look to tap into the potential of the region.  The signs of the region’s flourishing digital economy are undeniable, setting the stage for a new era of opportunities and innovation. The global rotational shift from goods to services is an additional tailwind for digital-first enterprises that are establishing their digital infrastructure to help them navigate increased geoeconomic turbulence in the region.[1]

Organizations looking to expand their business in an increasingly frictionless economy must assess their ability to adopt new digital capabilities and business models that are being driven by their customers and governments. Those who are successful will have greater opportunities to expand operations beyond local borders and remain competitive in a digital economy that is becoming progressively interconnected.

Closing the digital divide and enabling fluid cross-border data exchange

Even with the upswing of internet adoption, a young working population and positive economic tailwinds, Southeast Asia still faces challenges in creating an interconnected digital economy across all its participating countries. Across the region, disparities in internet access, speed and affordability have created gaps between countries and enterprises. While internet penetration there is high at around 70%[2], it tends to be through mobile broadband such as smartphones rather than fixed broadband needed for data-intensive business applications. The need for enterprise-level digital infrastructure to support cross-border data exchange is particularly pronounced in sectors like financial services, manufacturing, logistics and digital commerce. Bridging these gaps not only promotes digital inclusivity, it also supports organizations with their ongoing expansion strategies.

Equinix Metal®, bare metal as a service, and Equinix Network Edge can be rapidly deployed to provide low-latency connections to users at the digital edge. The solution fosters an environment of interconnectivity, allowing digital-first enterprises to deploy services, connect to the internet, conduct low-latency data exchange and access a diverse pool of partners and cloud service providers seamlessly.

Hybrid work transitions from trend to mainstay

Organizations understand that offering the flexibility of hybrid work is crucial to attracting and retaining talent. A study by Ecosystm revealed that 71% of employees in Southeast Asia prefer to work both from home and at the office, triggering a shift in work paradigms that place additional strain on existing networks. The advancement of video conferencing and collaboration tools allows employees to work from anywhere and opens up the talent pool for potential employers. At the same time, organizations are realizing that traditional security measures and digital infrastructure are no longer sufficient to support their operations.

Reliable connectivity, low latency and high bandwidth that can be easily deployed across a growing number of locations will be required to ensure adequate support for an increasingly remote workforce. Equinix Fabric®, Network Edge and Equinix Metal can be deployed virtually anywhere without hardware or additional equipment to supply enterprises with software-defined interconnection and the robust infrastructure solutions they need to support their mobile workforce.

Facilitating on-demand data to make AI accessible

In an era of digital, organizations must rapidly embrace digital transformation to meet stakeholder and market demands. According to Equinix 2023 Global Tech Trends Survey, 80% of IT decision-makers in Asia-Pacific are implementing artificial intelligence (AI) into their operations and business functions. Real-time integration of internal and external data has become essential for enterprises to extend their digital capabilities to include AI and machine learning (ML). Adopting a hybrid approach offers companies the best of both worlds: the simplicity and scalability of the public cloud for certain workloads, while avoiding the high costs associated with a fully cloud-based AI infrastructure. With a neutral platform ecosystem like Platform Equinix®, organizations can embrace a cloud-adjacent strategy, leveraging cost-effective on-premises infrastructure for resource intensive AI model training.

By strategically locating their AI infrastructure in proximity to cloud on-ramps provided by their chosen cloud providers, organizations gain the flexibility to tap into cloud services whenever necessary. This allows them to seamlessly scale their operations during periods of peak demand, ensuring optimal performance without incurring unnecessary costs. Adopting this AI infrastructure approach empowers companies to strike a balance between cost efficiency and scalability. Particularly, through the software-defined interconnection of Equinix Fabric, organizations are also able to tap into AI infrastructure to test and develop their own algorithms while maintaining proximity to the edge where data is being primarily generated or where the AI inference workloads need to be deployed. By leveraging the interconnection capabilities of Platform Equinix, organizations can build robust and adaptable AI infrastructure that maximizes their resources, accelerates innovation and enables them to stay ahead in the rapidly evolving AI landscape.

Building the foundational infrastructure for an interconnected digital ecosystem

As Southeast Asia continues to become economically intertwined, digital transformation will increasingly be relied upon to bridge the distance between distributed digital infrastructure throughout the region. According to Ecosystm, 52% of organizations are focused on a hybrid multicloud approach to leverage a mix of public, private and cloud-adjacent services to optimize performance, cost and security. Development of digital infrastructure will be necessary to further integrate the digital economy, experiment with new cutting-edge technologies and unlock untapped potential for businesses. In some emerging economies where connectivity is primarily mobile-first, Equinix will play an active role in laying the foundational digital infrastructure to support business needs and nurture the development of digital societies.

[1] https://www.businesstimes.com.sg/international/global/apac-growth-forecast-track-2023-moderating-2024-imf 

[2] https://www.statista.com/topics/9093/internet-usage-in-southeast-asia/#:~:text=The%20internet%20penetration%20rate%20in,several%20more%20Southeast%20Asian%20countries.

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Rajaneesh Kurup Director, Equinix Research Group, APAC
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