An investment rush by major Vietnamese firms including telecom giant VNPT and tech giant FPT has not been able to meet the demand for data centers in the country, market observers say.
State-owned telecom group VNPT has opened the VNPT IDC Hoa Lac data center, the biggest in Vietnam so far, in Hanoi’s Hoa Lac Hi-Tech Park. The facility, VNPT's eighth, covers 2.3 hectares and can support 2,000 racks.
Leveraging VNPT's strength as a leading Internet service provider (ISP) in Vietnam, the data center can reach an average of 2 Gigabits per second (Gbps) per rack for domestic connections and 0.5 Gbps per rack for international network connections.
The latest data center is part of VNPT's efforts to help meet the country's target of having all government agencies and 70% of businesses use cloud services provided by domestic firms, officials said.
With the latest addition, Vietnam now runs 39 small and medium scale data centers that together have 15 times the capacity of the VNPT IDC Hoa Lac center.
Data center investments have gathered momentum as Vietnam targets digital transformation of its fast-expanding economy and implements regulations on data localization for foreign firms.
In April 2022, Viettel announced it would build Vietnam’s largest data center in Ho Chi Minh City with an estimated investment of VND6 trillion ($254 million).
Two months later, Hong Kong-based Gaw Capital Partners announced it had completed the acquisition of a 6,056 square-meter greenfield plot within a data center cluster at HCMC's Saigon Hi-Tech Park with plans to develop a facility with an IT capacity of 20 megawatts (MW).
In August 2022, CMC Corporation, a local ISP, inaugurated a 1,200-rack data center, also in HCMC, with a total investment of VND1.5 trillion (nearly $64 million).
In December 2022, local tech unicorn VNG Corporation launched its tier-III VNG Data Center at the Tan Thuan Export Processing Zone, District 7, HCMC. Initially, the 7,800-square-meter data center features 410 racks for installing servers with a designed capacity of up to 10 kW per rack. The facility plans to expand capacity to 1,600 racks to facilitate Vietnam's digitalization process.
With global demand for data estimated to double every three years, Vietnam will have to establish at least five facilities equivalent to the latest one every year, Minister of Information and Communications Nguyen Manh Hung said at a launching ceremony for the VNPT facility earlier this week.
In a digital economy, big data and big data processing will become the largest sector, the minister added. He congratulated VNPT and urged the telecom giant and competitors to work together for realizing the common vision for data infrastructure in Vietnam.
The number of data centers in Vietnam is set to rise exponentially as both domestic and foreign companies look to boost capacity and meet rising demand, according to a report by U.S. market research and consulting company Arizton.
The Vietnamese data center market size is expected to nearly double to $1.04 billion by 2028 from $561 million last year, meaning a compound annual growth (CAG) rate of nearly 10.8%, the report said.
Vietnam is pursuing a soft management approach for data center services and cloud computing, Minister Hung said at a National Assembly plenary session in June. The aim was to promote the sector’s development while ensuring national security, he added.