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Japan - Data Centre Market

August 2019 | | ID: J512F0A98918EN
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A comprehensive report on the Data Centre Market in Japan.

EXECUTIVE SUMMARY

Japan remains an important hub for data centre activities

Japan has a strong presence as a regional Asian data centre provider and is a global financial and corporate hub and one of the fastest evolving digital markets in the world. Data centre locations have easy access to high-speed international connectivity, with landing points for several submarine cables that connect with the western United States. Japan’s digital economy is highly mature and difficult to serve from overseas or alternative locations.

Japan has now evolved into more of an international data centre market driven by the global hyperscale cloud providers expanding in the Tokyo and Osaka markets.

The Japanese data centre market has traditionally been very insular, dominated by domestic Systems Integrators / IT companies such as Fujitsu, Hitachi, Mitsubishi Electric and NEC, offering a one-stop shop for their IT services. However, this has recently changed significantly with international data centre firms such as Digital Realty, Equinix and Colt DCS have all deploying sizeable data centre footprints in both the Tokyo and Osaka markets.

As international businesses continue to enter the country, especially from China, this is driving higher data usage due to increased usage of data hungry applications and platforms such as: data analytics, big data and Artificial Intelligence type workloads, supported by high usage of digital media content and streaming platforms.

A range of global companies have all invested in data centre infrastructure in Japan either by building their own data centres or acquiring large wholesale space within global data centre specialist providers. These include: global multimedia and content providers, financial services firms and IT companies.

The diversity and number of local and international cloud providers entering Japanese data centres has significantly increased over the last three to five years, especially from large public international cloud providers, such as Amazon Web Services (AWS), Google, Microsoft Azure and IBM SoftLayer.

An increasing number of organisations in Japan are implementing comprehensive real-time visibility of their data centre operations, in order for them to optimize their existing infrastructure to benefit from cost savings by for example adjusting cooling in accordance to load capacity, track carbon emissions and resources.

Nearly all the major hosting and cloud providers globally have built a presence in Japan. In particular, hyperscale and international public cloud service providers and digital media content providers such as Google have been key in driving demand for data centre services, significantly increasing their uptake of data centre capacity in Asia over the past few years, by building massive-scale platforms.

Some overseas data centre providers such as Digital Realty, have successfully established a foothold, by teaming up with local Systems Integrators and IT companies rather than via acquisitions.

A growing number of data centre operators will choose to locate their data centres in the other Asian markets to enhance data speeds to end-user consumers in emerging densely populated cities, as local demand increases and cross-border data flow regulations improve.

Recent growth has been particularly strong in developing markets such as Malaysia, Indonesia, the Philippines, Thailand and Vietnam. Vietnam in particular has seen very strong growth since 2017, including the construction of SUPERNAP in Thailand. Compared to developed markets such as Japan which have a scarcity of available land at very high cost to purchased, land is much cheaper and more readily available in these developing markets.

Key developments:
  • The diversity cloud providers in Japan entering data centres has significantly increased over the last three to five years.
  • An increasing number of organisations are implementing comprehensive real-time visibility of their data centre operations.
  • Data centre providers such as Digital Realty, have teamed up with local Systems Integrators / IT companies.
  • A growing number of data centre operators will choose to locate their data centres in the other cheaper Asian markets.
Companies covered in this report include:

Digital Realty, Equinix, TELEHOUSE (KDDI)), Arteria, Unisys, Fujitsu, NTT, Telstra, AT&T, Cyxtera, Verizon, Singtel.
1 MARKET CLASSIFICATION AND DEFINITIONS

1.1 Classification of data Centres
1.2 Data Centre Models
1.3 Colocation vs Managed Hosting
1.4 Wholesale vs Retail

2 CATEGORY OF DATA CENTRE PROVIDERS

2.1 Introduction
2.2 Specialist Data Centre Providers
2.3 Telecommunications Service Providers
2.4 IT Service Providers
2.5 Modular Data Centre Providers
2.6 Commercial Property Owners

3 DATA CENTRE TRENDS

3.1 Growing importance of Regional Data Centres
3.2 Consolidation to Larger, More Efficient Data Centres
3.3 Migration of Managed Hosting to Cloud Services
3.4 Cloud Providers Driving the Growth of Data Centre Ecosystems
3.5 High-Density Data Centre Requirements
3.6 New data centre models

4 JAPAN MARKET ANALYSIS

4.1 Japan is a highly developed regional hub data centre hub
4.2 Shift towards cloud and hyperscale data centre providers
4.3 Key market characteristics
4.4 Key regional markets

5 MARKET DRIVERS

5.1 Introduction
5.2 Robust and advanced Telecommunications Infrastructure
5.3 Growing Demand for Cloud Computing
5.4 Rising need for Data Security
5.5 Growing Need for Disaster Recovery Services

6 MARKET RESTRAINTS AND CHALLENGES

6.1 High construction costs and difficulty securing new sites
6.2 High risk of natural disasters
6.3 Long term Planning for Additional Capacity
6.4 Strong growth in neighbouring developing markets

7 STATISTICS BY PROVIDER AND FORECAST

8 ASIA - REGIONAL ANALYSIS

8.1 Strong Regional Growth Continues
8.2 Large-scale cloud and content providers driving growth
8.3 Inhibitors and Market Challenges

9 DATA CENTRE PROVIDER PROFILES

9.1 AirTrunk
9.2 ARTERIA Networks
9.3 AT&T
9.4 Colt Data Centre Services
9.5 Cyxtera
9.6 Digital Realty
9.7 Equinix
9.8 Google
9.9 NEC
9.10 NTT
9.11 Oracle
9.12 Salesforce
9.13 Telehouse (KDDI)
9.14 Telstra

10 ABOUT THE AUTHOR

11 RELATED REPORTS

LIST OF EXHIBITS

Exhibit 1 - Classification of Data Centres
Exhibit 2 - Data Centre Models
Exhibit 3 - Outsourced Data Centre Services
Exhibit 4 - Market Segmentation by Classification of Data Centre Provider
Exhibit 5 - SWOT Analysis Specialist Data Centre Providers
Exhibit 6 - SWOT Analysis Telcos/Carriers
Exhibit 7 - SWOT Analysis IT Service Providers
Exhibit 8 Migration Path to Cloud Services within Data Centres
Exhibit 9 Global Cloud Providers Present in local Data Centre Facilities
Exhibit 10 - Key Data Centre Drivers


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