by Chris Paggioli | 04/28/2021
Over the past twenty years, technology has completely transformed enterprise workflows and the world we live in generally. Today, businesses use robots and smart glasses to help ship items faster, and leverage robotics and automation to manufacture their products at higher speeds. Still, not every modern, operation-optimizing technology is as flashy and perceivably futuristic as those examples; there are also ever-improving enterprise mobile computing devices and applications, invaluable inventory and warehouse management systems, cloud computing capabilities, 5G Internet and more that make frontline workforces more efficient.
There has been a consistently increasing investment in such enterprise technologies across the Americas and EMEA, while APAC has historically lagged in similar investments. This is most likely due APAC operations competing with thinner margins and lower-cost labor. With many leading enterprise technologies having a moderate cost of adoption, APAC competitors have been unable to justify such expenses while instead utilizing a greater volume of lower-cost labor. However, in recent years there has been a significant uptick in such investments in APAC markets as leading enterprise mobile technologies have increasingly proven their ROI and business/use cases.
Enterprise spending on cloud infrastructure services, for example, is estimated to have grown by 35% in 2020 on top of a decade-long trend of strong growth in cloud technologies. In APAC alone, it is estimated that investment in cloud technology has increased by 38% in 2020 compared to the year prior. These APAC enterprises are looking to reinvent their legacy infrastructures, with Internet-as-a-Service (IaaS) responsible for 48% of those investments. Software-as-a-Service (SaaS) was the second-largest contributor to overall cloud spending within the APAC region in 2020, at a share of around 40%, with Platform-as-a-Service (PaaS) spending making up 11% of cloud investments.
Outside of cloud infrastructure, VDC Research has also seen significant investments by APAC competitors in other mobile technology solutions. In the wearables market, APAC is the fastest growing region across several categories, with segments such as body cameras growing at an 11.4% CAGR and smart glasses growing at 19.3% over a five-year forecast period. In terms of other network infrastructure needs, APAC’s investments into Private LTE grew at in the double-digits as well. No matter the area of investment, whether in wearable technologies or cloud and network infrastructures, the APAC region has been growing at a faster rate than other regions, sometimes by a significant margin.
For example, Digital Realty has extended its global reach of PlatformDIGITAL with its third data center in Singapore. Digital Realty is a leading global provider of carrier and cloud neutral data centers. Its new data center in Singapore is a multi-story, 50 megawatt facility, and is Digital Realty’s largest data center within Singapore and brings their total investment within the country to over $1 billion. This investment will allow local and multi-national enterprises to deploy cloud infrastructure and scale their businesses. This is done by offering customers the full spectrum of colocation services and connections to a data community with optimal proximity to carriers, networks and cloud service providers. The Digital Realty campus is in a prime location near Singapore’s central business district, while being strategically located in close proximity to Changi north cable landing station, a key sub-sea interconnection hub for the region. Within APAC, Digital Realty operates a rapidly expanding network of industry leading data centers located in Singapore, Hong Kong, Tokyo, Osaka, Seoul, Melbourne, and Sydney.
Digital Reality’s latest business activity is just one example of the tremendous growth of enterprise and cloud technologies investment across APAC. This has strong implications for both enterprise hardware and software vendors, in addition to global supply chains. Vendors have noted the trend that APAC spending on their enterprise technologies has grown significantly relative to the region’s own historic investments, but has still lacked compared to the Americas and EMEA in terms of overall revenues generated. While it is unlikely that APAC enterprise technology spend will match the dollar volume of the Americas and EMEA near term, the region’s technology investment growth rates across most categories make it a significant opportunity for vendors to heed. The region’s growing investment in enterprise technologies will also drastically improve the visibility and efficiency of operations across APAC, thereby positively impacting global supply chains. If you are interested in our in-depth reporting on enterprise technology markets in general, or the specific growth categories for and market dynamics of the APAC region, please view our 2021 Research Outline.