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Vietnamese firms race to build data centers

Vietnamese firms race to build data centers

Wednesday, April 24, 2024, 14:30 GMT+7
Vietnamese firms race to build data centers
A data center which has been recently put into operation in Vietnam. Photo: Dieu Linh / Tuoi Tre

Over the past few years, many local enterprises have poured trillions of Vietnamese dong (VND1 trillion = US$39.3 million) into data center projects meeting international standards, giving major businesses and banks in Vietnam alternatives to overseas data centers.

Vietnamese military-run telecom group Viettel opened its 14th data center in the Hoa Lac Hi-Tech Park in Hanoi on April 10.

The center, whose floor area is 21,000 square meters, has 60,000 servers, over 2,400 racks, and a total electrical capacity of 30 megawatts. This is the largest data center in Vietnam.

The group’s 14 data centers have a total floor space of 81,000 square meters, 230 servers, 11,500 racks, and 87 megawatts of electricity capacity -- equivalent to other large data centers in the world.

Viettel’s 14th data center is also the first in Vietnam to commit to using renewable energy to meet 30 percent of its electricity consumption.

According to some sources, the center carries a price tag of VND6 trillion ($236.4 million).

In October last year, VNPT, another Vietnamese telecom giant, put into operation its eighth data center in the Hoa Lac Hi-Tech Park. The center spans 23,000 square meters and has some 2,000 racks.

The facility has achieved the Uptime Tier III Certification for construction, installation, and design and will soon be certified for operational sustainability. 

Uptime Tier III is the second-highest level of the globally recognized standard for data center reliability and overall performance.

Earlier, VNG Corporation also inaugurated its data center meeting Uptime Tier III standards, covering a floor area of 12,400 square meters and including 1,600 racks.

FPT, another local tech giant, is constructing its fourth data center in the Saigon Hi-Tech Park in Thu Duc City, Ho Chi Minh City.

At present, the firm is operating three data centers with a total floor area of 17,000 square meters and 4,000 racks.

According to Minister of Information and Communications Nguyen Manh Hung, Vietnam is currently home to 32 small and medium data centers with over 20,000 racks and a combined capacity of 145 megawatts.

With the boom of digital transformation in the Southeast Asian country, local enterprises have plans to develop more data centers with a higher scale to meet data storage demand.

Tao Duc Thang, chairman and general director of Viettel, said the group would invest an additional VND10 trillion ($394 million) in expanding its data centers to boast 17,000 racks by 2025.

By 2030, the investment will be increased to VND40 trillion ($1.57 billion) so that the firm will own 34,000 racks.

VNPT general director Huynh Quang Liem said the group would continue seeking opportunities to cooperate with partners and investors to build more region- and world-class data centers using green and sustainable technology with the aim of becoming a digital hub in the region.

Foreign rivals’ engagement

According to several international organizations, the annual growth of Vietnam's data center market is over 15 percent. The country is one of the 10 emerging data center markets in the world.

However, the local data center market remains modest compared with Singapore, Indonesia, Malaysia, Thailand, and the Philippines.

Vietnamese enterprises are assumed to be inexperienced in operating data centers in comparison with behemoths like Google and Amazon.

As a result, the competition is increasingly fierce, said Nguyen Thanh Danh, CEO of VNG Data Center.

Vietnamese companies encounter several challenges: their data center brands lack recognition in the global market, their infrastructure does not meet the requirements of foreign partners, and their finance and interactions with international customers are constrained.

Nevertheless, domestic firms have a deep understanding of the local market and regulations. They also have advantages in prompt customer services and lower service prices.

Foreign companies have yet to develop their own data centers in Vietnam but have shaken hands with local firms to do the job, which has helped improve the quality of such data centers and their competitiveness, Danh said.

Le Hoai Nam, deputy director of Viettel IDC, said when data centers had yet to develop in Vietnam, many Big Tech companies had plans to build them in the country.

However, local giants, such as Viettel, FPT, VNPT, VNG, and CMC, have launched large data centers over the past three years.

Bid Tech firms have reconsidered their plans, Nam noted, adding that they found cooperation with domestic firms the most feasible solution.

Viettel and Microsoft have recently entered into an agreement on deploying cloud computing by combining Viettel Cloud infrastructure and Microsoft Azure Cloud, one of the fourth-largest cloud ecosystems in the world, to distribute Microsoft apps in Vietnam.

Meanwhile, Viettel Cloud will help Azure Cloud solve problems of customers in the public governance segment thanks to the former’s data centers and understanding about the domestic market.

Data centers are considered the heart of the Internet and the backbone of the digital economy, and play a crucial role in data storage, processing, and management.

Vietnam’s data centers have proved their role in the economy with a sharp increase in revenue and the creation of jobs for local laborers.

Major customers of local data centers are game, e-commerce, finance, and stock companies, as well as banks.

Research and Markets, the world’s largest market research store, estimated Vietnam’s data center market to reach $1.03 billion by 2028 and over $1.26 billion by 2030 with an average growth rate of 10.8 percent per year.

The strong development of data centers poses challenges in water and power supply, carbon emissions, and waste treatment.

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Thanh Ha - Duc Thien / Tuoi Tre News


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