Malaysia's Data Center Market Booms as Cloud Service Providers Invest Billions

The technology industry has recognized the rapid growth of the Asia-Pacific (APAC) data center landscape, fueled by cloud computing, big data, and e-commerce demands. In recent years, tier 2 markets have become popular locations for data center development, with cloud service providers prioritizing dedicated cloud regions over major hubs like Singapore and Tokyo. Malaysia is emerging as one of the most dynamic data center markets in the APAC region, with the impressive growth of its data center industry occurring in two primary regions - Greater Kuala Lumpur and Johor.

Over the past decade, Malaysia's data center market has seen significant growth, fueled by increased interest in cloud services, government-backed initiatives, and the Singapore data center moratorium. The initial data centers in Malaysia were established within Kuala Lumpur's Central Business District and were relatively small. However, as global data center operators and cloud service providers begin to establish a presence in these markets, their standings are anticipated to shift in the upcoming years.

The Knight Frank SEA-5 Data Centre Opportunity Index (SEA-5 Index) analyzes key markets within the SEA-5 and provides insights into each country's data center rankings compared to its peers. Malaysia's impressive growth in the data center industry is reflected in its strong rankings in the SEA-5 Index, which is set to increase as global data center operators and cloud service providers invest billions in the country's cloud infrastructure market.

One such example is AWS's recent announcement to invest US$6 billion in the Malaysian cloud infrastructure market by 2037. This highlights the cloud service provider's commitment to hosting Malaysian data within the country, as opposed to other key data center hubs in the region, such as Tokyo and Singapore. The locations offer a less constrained power grid and increased geographical diversification compared to Cyberjaya, providing enhanced redundancy for data center clients looking to distribute computing loads across multiple locations.

Overall, Malaysia's data center market is booming, with cloud service providers investing billions in the country's cloud infrastructure market. The country's strong rankings in the SEA-5 Index demonstrate its potential for continued growth and expansion in the region.