The Evolving Landscape of Data Centers in Vietnam

2023/08/24 08:32

As technology continues to reshape the global business landscape, data centers have emerged as the critical infrastructure powering our interconnected world. In this digital era, Vietnam has swiftly emerged as a vibrant player in the realm of data centers, fueling its economic growth and digital transformation.

With a strategic location, a burgeoning tech sector, and a proactive government, Vietnam has become an attractive destination for businesses seeking reliable, secure, and scalable data center solutions. In this article, we delve into the fascinating landscape of data centers in Vietnam, exploring the key factors contributing to its rapid development, the driving forces behind its growth, and the unparalleled opportunities it presents for both domestic and international businesses.

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Vietnam's economy has experienced robust growth in recent years
Economic landscape in Vietnam


The National Digital Transformation Program in Vietnam, with its goals set for 2025 and an orientation towards 2030, has played a crucial role in facilitating the establishment of IT infrastructure in the country. This program has received significant political support, recognizing the importance of digital transformation. The ongoing COVID-19 pandemic has further accelerated this process, as nationwide lockdowns and movement restrictions necessitated the adoption of digital solutions.

Thanks to these combined efforts, Vietnam has made remarkable strides in recent years. The country's digital economy has experienced unprecedented growth, surpassing other nations in Southeast Asia. Since 2015, Vietnam's digital economy has been expanding at an impressive rate of approximately 38 percent annually, outpacing the regional average of 33%.

According to a report by Google, Vietnam's internet economy has witnessed significant growth, expanding by 16 percent from 2019 and reaching a value of US$14 billion. This growth rate places Vietnam among the top countries in Southeast Asia. The report also projects a continued upward trend, estimating a 29 percent growth in Vietnam's digital economy from 2020 to 2025, making it the second-highest growth rate in the region, just behind the Philippines at 30%.

Vietnam's ICT sector is experiencing robust momentum, supported by a strong digital infrastructure. The annual growth rate of cloud computing in the country is projected to exceed 30 percent. Additionally, Vietnam boasts 27 data centers as of 2022, indicating the country's commitment to developing and expanding its data center industry.

Apart from its rapid growth, Vietnam offers several appealing factors for foreign investments. One notable advantage is its participation in The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which enhances its attractiveness as an investment destination. Additionally, Vietnam benefits from low labor and material costs, making it a cost-effective option for businesses. Furthermore, the country possesses a young and abundant workforce that is continuously improving in terms of quality, adding to its allure for investment opportunities.

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Vietnam is a member of CPTPP Agreement
The opening of VNG Data Center


These significant contributing factors have led to the remarkable advancement of Vietnam's digital infrastructure in recent years. Presently, Vietnam is home to 27 data centers, distributed across different regions. The Northern region accommodates 46% of the data centers, followed by the Southern region with 35%, and the Central region accounting for 18%.

The year 2022 has witnessed an exceptional surge in the development of data centers in Vietnam. In mid-December, the unicorn company VNG made headlines as it launched its state-of-the-art data center in Ho Chi Minh City, attracting widespread attention across newspapers. The newly operational center currently encompasses 410 racks, with plans to expand its capacity to accommodate 1,600 racks. It is designed to cater to various digital service platforms, data storage needs, specific cloud solutions, and an expanded range of cloud services for Vietnamese customers.

Notably, this data center is among the three in Vietnam that have successfully achieved Tier III certification in both design (TCDD) and installation (TCCF) from the renowned Uptime Institute. This globally recognized standard assesses the performance of data centers, specifically evaluating their electromechanical infrastructure.

VNG Data Center exemplifies a strong commitment to sustainability. It has implemented measures to minimize its environmental impact through an efficient design. The data center utilizes a separate hot/cold aisle configuration and a sunken floor design, which contribute to improved energy efficiency. In fact, the data center has achieved an impressive PUE (Power Usage Effectiveness) of less than 1.45 (specifically 1.33), as evaluated by Uptime Institute.

During the construction phase, VNG Data Center took steps to reduce its carbon footprint by employing a sustainable insulated precast façade. These initiatives demonstrate the data center's dedication to minimizing environmental impact and promoting sustainability practices within the industry.

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VNG Data Center is one of Vietnam's top three data centers that has achieved Uptime Tier III Certification
The opening of VNG Data Center


These significant contributing factors have led to the remarkable advancement of Vietnam's digital infrastructure in recent years. Presently, Vietnam is home to 27 data centers, distributed across different regions. The Northern region accommodates 46% of the data centers, followed by the Southern region with 35%, and the Central region accounting for 18%.

The year 2022 has witnessed an exceptional surge in the development of data centers in Vietnam. In mid-December, the unicorn company VNG made headlines as it launched its state-of-the-art data center in Ho Chi Minh City, attracting widespread attention across newspapers. The newly operational center currently encompasses 410 racks, with plans to expand its capacity to accommodate 1,600 racks. It is designed to cater to various digital service platforms, data storage needs, specific cloud solutions, and an expanded range of cloud services for Vietnamese customers.

Notably, this data center is among the three in Vietnam that have successfully achieved Tier III certification in both design (TCDD) and installation (TCCF) from the renowned Uptime Institute. This globally recognized standard assesses the performance of data centers, specifically evaluating their electromechanical infrastructure.

VNG Data Center exemplifies a strong commitment to sustainability. It has implemented measures to minimize its environmental impact through an efficient design. The data center utilizes a separate hot/cold aisle configuration and a sunken floor design, which contribute to improved energy efficiency. In fact, the data center has achieved an impressive PUE (Power Usage Effectiveness) of less than 1.45 (specifically 1.33), as evaluated by Uptime Institute.

During the construction phase, VNG Data Center took steps to reduce its carbon footprint by employing a sustainable insulated precast façade. These initiatives demonstrate the data center's dedication to minimizing environmental impact and promoting sustainability practices within the industry.

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Moving towards net-zero is a pivotal step towards achieving sustainability goals for businesses

While this regulation aims to enhance data security and sovereignty, it may pose additional costs for businesses in terms of data localization and the establishment of representative offices.

Even so, Vietnam has emerged as a rising star in the field of IT development, particularly in the data center industry, within the Asia-Pacific region. While there is always room for improvement and the need for adjustments, Vietnam's strong government support and the attractive features it offers for foreign investments make it a promising contender for enhancing its prominence in the coming years.

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