Mr Claudio Castelli: A critical mass of relevant expertise is on the verge of taking deep root in Singapore.

Singapore is emerging as the cloud computing hub in Asia-Pacific as it consolidates its position as the preferred location for data centres in the region.According to research firm Ovum, Singapore has been the recipient of increased investment in data centres, and multinational corporations (MNCs) operating in the region are targeting the city-state as the infrastructure hub for a new wave of cloud computing services to be delivered from these data centres.

The latest example is the announcement by Tata Communications on 1 September 2010 that it is opening a US$180 million enterprise-class data centre here. The facility will give Asia Pacific enterprises access to Tata Communications’ suite of data centre services including managed security services, data centre co-location and network co-location. The data centre will also support Tata Communications’ cloud computing and managed hosting and storage services, which the company says it will launch in the future.

Other global telcos with data centres in Singapore include AT&T, BT, Verizon Business, SingTel, and Orange.

As the major global financial hub of Southeast Asia, Singapore has strategic advantages, said Ovum’s senior analyst Mr Claudio Castelli. It has a stable government that has attracted many MNCs, and 60 per cent of MNCs with more than 7,000 employees have their Asia-Pacific regional headquarters in Singapore. It is also where most large software application developers such as Google and Microsoft choose to establish their regional presence.

Singapore is also one of the major network hubs in the region, providing service providers with a wide choice of network partners. This increases its attractiveness as a data centre location as service providers seek the optimum balance between having few large global data centres for better economies of scale, and placing data centres closer to customers to better enforce security policies, improve access to content, and reduce network latency.

In Ovum’s view, since cloud service providers will need to offer demanding Service Level Agreements covering real-time and critical business applications in the cloud, the geographical location of the data centre is more important than ever. “Centralisation on a regional level will be the answer, and Singapore is in an advantageous position as a result,” said Mr Castelli.

According to Ovum, Japan, Singapore, and Hong Kong contain most of the data centres in the Asia-Pacific region. While the facilities in Japan are mainly to support its domestic market, Singapore and Hong Kong are competing to be the preferred location for hosting data centres for service providers that serve MNCs in the region.

“Despite its high real-estate costs and electricity supply risks, we believe (Singapore’s) geographically strategic position, status as a financial centre, and stable government will continue to boost its position as a favoured hosting location for telcos developing cloud computing services in Asia-Pacific,” said Mr Castelli.

Many of the early service offerings within data centres included basic co-location and network services, with very few complex managed services. However, service providers are starting to position themselves deeper in managed services, complex hosting, security, and IT services. In addition, the major global carriers are expanding this capability beyond their respective home regions to address global MNC requirements.

“We think these developments will create a virtuous circle in Singapore. Most telcos in the region have built strong partner relationships and capabilities in these areas. We believe these will support service providers’ product evolution towards converged, hosted ICT, unified communications and collaboration application-based, and
IT services.”

Telcos have also invested in professional services teams in Singapore, thereby recognising the importance of professional services, especially at the early stages of CaaS deployment, to support MNCs with their virtualisation transformation and early adoption of cloud computing services. “Regional professional services capabilities or partnerships with local companies will be essential for coverage outside a carrier’s home region – and a critical mass of relevant expertise is on the verge of taking deep root in Singapore,” said Mr Castelli.