Thailand's Data Center Providers Flourish While The Overall Economy Suffers From Political Turmoil

While Thailand’s overall economy is suffering terribly from the country’s ongoing political turmoil, the country’s data center service providers have miraculously been experiencing unexpected growth in business, researchers from Frost & Sullivan said.

The Thai data center industry grew 21 percent in 2013, compared to the previous year, with total revenue in excess of 1,700 million baht ($51.84 million). Frost & Sullivan expects the industry to continue to enjoy strong growth of more than 15 percent in 2014.

“Despite recent political turmoil and ongoing economic downturn, Thai enterprises, both from the public and private sector, turned their attention to strengthening their data centers,” said Teera Kanokkanjanarat, senior ICT industry analyst for Frost & Sullivan. “Many began to include data center investment in their business continuity planning agenda."

The Frost & Sullivan research note cites the three key factors for such unexpected growth in the face of political instability as cloud computing adoption, rising demand in Disaster Recovery (DR) Solution and increasing demand of connectivity within Southeast Asia. The trend toward cloud computing is by no means new in Thailand, but 2013 saw the industry take off.

“Prior to 2013, most enterprises were still in the learning and trial period for cloud computing adoption,” Kanokkanjanarat said. “As cloud computing in Thailand has gained maturity and trust, the rate of adoption has also risen rapidly.”

On the other hand, rising demand in DR Solution is driven by more specific events like the political movement, which triggered a few major shutdowns of data center sites in 2013, according to Kanokkanjanarat. As a result, both private and public enterprises have begun looking into recovery solutions in case of emergencies.

Despite political unrest, Thailand remains an important country in the larger Southeast Asia region, and increasing need to connect with other member states of the Association of Southeast Asian Nations (ASEAN) will continue to fuel growth in the data center industry.

“As data center providers continue to improve their facilities and level of their services to meet international standards, more international providers also express their interests in entering the Thai market either as investors or forming joint ventures with local providers,” Kanokkanjanarat said.