January 5, 2018

Colt to flag off APAC expansion with data centers in India and Singapore

The move is aims to tap into the fast-growing APAC region, with Malaysia and Indonesia next in line for expansion

Data center company Colt has announced that they are all set to build data centers in India and Singapore in a bid to expand their global footprint. They also added that they chose to enter India and Singapore first after getting acquainted with the dynamics in the Singapore market.

Colts admit that the usual trend of western companies entering China while foraying into the APAC region could backfire because of intense competition in the region. They also revealed that this decision was influenced by them running co-location data centers in Singapore and Hong Kong with data center provider Digital Realty. Explaining that move, Quy Nguyen, Vice-President for Global Accounts and Solutions at Colt said:

We did that mainly for speed to market – we wanted to get into those markets quickly and our intent was to launch our own datacentres after we understood those markets well enough.

Today, Colt claim that they are comfortable starting with a fairly acquainted business weather of Singapore and are ambitious of running the show alone. However, they have put their China plans on hold because they feel that Chinese companies prefer working with domestic providers because of stringent Government policies. Lamenting this factor, Nguyen further added:

It’s very difficult to get big anchor demand unless you are a Chinese company. Right now, the Chinese are willing to work with us outside of China, but when it’s Hong Kong or China, they would rather work with the likes of GDS.

Colts further added that they are planning to set-up their India data center on the outskirts of Navi Mumbai to allow the data center have better efficiency. Emphasizing this point, Nguyen commented:

Unless you have an edge datacentre, it’s quite difficult to make money on a small scale. You really have to build it big to make a return in this business. Although there were pockets of customer interest, we felt that the risk was higher in developing markets but it’s something we’re keeping an eye on.

According to Frost and Sullivan, the data center market is on the rise with a predicted compound annual growth rate of 14.7% from 2015 to 2022. They further added that the market will reach from USD 14 billion now to USD 31.95 billion by the end of 2022.

Industry watchers predict that this growth will be driven by rapid expansion in the south-east Asia region with India and Singapore helmed to be at the top. Looks like this move by Colt is a step in line with the predictions of industry analysts.

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