Building data centers: Responding urgently to digital transformation

Investing tens of thousands of billions of dong

Viettel Group is rushing to build a data storage service center combined with Viettel high-tech research and development in Tan Phu Trung Industrial Park (Cu Chi district, Ho Chi Minh City).

In mid-May 2023, Vice Chairman of the Ho Chi Minh City People's Committee Vo Van Hoan awarded the Investment Registration Certificate for this center project to Viettel with an investment capital of 14,700 billion VND, deployed on an area of ^{​​40,000m2} . Phase 1 is expected to operate from the 4th quarter of 2025 and phase 2 from the 1st quarter of 2028.

This is a project in the field of digital infrastructure, realizing Viettel's investment memorandum with the People's Committee of Ho Chi Minh City in activities, supporting digital transformation goals at the Investment Promotion Conference in Hoc Mon district, Cu Chi district in April 2022. Viettel representative said that the project is a data transit point attracting foreign enterprises to Vietnam such as Microsoft, Google and Amazon... and is a broadband connection point from Ho Chi Minh City to points around the world .

VNG 's data center in Tan Thuan Export Processing Zone (District 7, HCMC) is monitored 24/7

Not only Viettel Group, in Ho Chi Minh City, many other technology enterprises also invested thousands of billions of VND to build data centers. A typical example is CMC Data Center Tan Thuan (District 7, Ho Chi Minh City) with an investment capital of 1,500 billion VND, is the most modern and secure data center in Vietnam and Southeast Asia. CMC Data Center Tan Thuan was designed by B-Barcelona Singapore in compliance with the most stringent standards for a modern data center such as PCI DSS, ISO 27001:2013, ISO 9001:2015...

“The center serves the development goal of Ho Chi Minh City by 2030 to become a city of high-quality services, modern technology, leading in the development of the digital economy and digital society. To achieve that goal, the direct participation of potential technology enterprises is very important. The operation of CMC Data Center Tan Thuan also marks a new development step to bring Vietnam closer to the goal of becoming the Digital HUB Regional Data Center of Asia - Pacific that we have chosen,” said Mr. Nguyen Trung Chinh, Chairman of the Board of Directors, Executive Chairman of CMC Technology Group.

Similarly, VNG also built a new data center in Tan Thuan Export Processing Zone (District 7, Ho Chi Minh City) with a scale of ^7,800m2 , floor area of ^{​​2,400m2} , providing 410 rack cabinets (server installation cabinets) and expected to expand to 1,600 rack cabinets to flexibly and promptly respond to the strong growth in the digital transformation process in Vietnam. VNG uses the most advanced technologies in the Data Center industry, including a dual backup power system to ensure a stable power supply and a customized DCIM system used for automatic operation and monitoring to limit human errors, quickly detect and fix technical errors.

Previously, a series of enterprises such as Viettel, VNPT, MobiFone... have invested in data centers in many provinces and cities. MobiFone has invested in 4 data centers in Hai Phong City, Da Nang City, Ho Chi Minh City and Dong Nai Province. MobiFone aims to own 7 new data centers by 2025 and expand the scale of existing data centers to meet the digital transformation needs of organizational and business customers.

Great potential

The country currently has 33 data centers operated by 48 service providers, with an estimated total capacity of about 80MW – as of Q1-2024. The main data center clusters are in Hanoi and Ho Chi Minh City. The Vietnamese data center market generated revenue of USD 685 million in 2023 and is expected to grow to USD 1.44 billion by 2029, a compound annual growth rate of 13.1%.

Data centers are increasingly receiving large investments as many foreign e-commerce businesses place servers in Vietnam to meet regulations and the growing number of customers here.

Decree 53/2022/ND-CP of the Government stipulates that foreign enterprises providing services in Vietnam must store information and data of Vietnamese users in the country. The wave of investment by foreign enterprises also leads to the need for data storage and processing by multinational corporations.

According to the latest report from Viettel IDC, the global Data Center market is about 321 billion USD, with an average growth rate of 7.3%/year. Asia-Pacific is one of the regions with a dynamic data center market, with a growth rate of 19%/year until 2028. It is forecasted that the market size in Vietnam will reach 1.266 billion USD by 2030, with an average growth rate of 10.8%/year.

However, according to Ms. Trang Bui, General Director of Cushman & Wakefield Group, the data center market in Vietnam is still in its infancy with a modest growth rate. With competitive construction costs and land prices, and a prime geographical location, Vietnam is an emerging market that is always in the sights of investors. This is quite similar to statistics from international organizations when they commented that Vietnam's data center market is still small compared to Southeast Asian countries such as Singapore and Malaysia.

The leaders of the Ministry of Information and Communications stated that in the coming time, the demand for data centers will continue to increase. The fact that Vietnamese enterprises are investing heavily in data centers affirms the view that Vietnamese data is a resource and asset of Vietnam and must be stored and processed in Vietnam or under the permission of Vietnam. This also shows that national digital sovereignty is closely related to Vietnam's digital infrastructure, because digital infrastructure is not only the infrastructure of communications, but also the infrastructure of the digital economy, promoting digital transformation.

BA TAN

Source: https://www.sggp.org.vn/xay-dung-cac-trung-tam-du-lieu-dap-ung-cap-thiet-cong-cuoc-chuyen-doi-so-post747647.html