Investing in a Data Center in Vietnam

Data centers in Vietnam are experiencing a boom as the economy picks up and more companies embrace technology to streamline their operations. The industry is at its infancy and infrastructure has to be scaled up quickly to meet the growing demand. It's also vital for service providers to ensure stable energy supply and have strong understanding of the country's complicated regulatory landscape.

The country had strict rules regarding foreign ownership of cloud and data companies until last week. The new Law on Telecommunications has eliminated the cap of 49% for foreign ownership. This allows foreign investors to own all data and cloud businesses. This is a great change for the industry since it will increase foreign investment and improve tech capabilities in the country.

One company that is taking advantage of the policy shift is Google who is considering the possibility of building a "hyperscale" data center near Ho Chi Minh City, one source familiar with the plans told. The source did not specify the amount of the investment. It would be an important boost to the industry of data centers in Vietnam. This would be the first time an important U.S. technology company invests in the country. Large data centers typically prefer to house their facilities in countries that are not as affluent due to security concerns and high operational costs.

Alibaba China, a Chinese firm, is also building data centers in Vietnam. This is in order to comply with local laws that require businesses to keep local information. It currently has data centers owned by telecommunications firms Viettel and VNPT to meet the requirement.

The country is a popular location for cloud service providers, with Ho Chi Minh City and Hanoi both emerging as vibrant data center hubs. A number of international operators, such as NTT Global Data Centers, Edge Centres and STT Global Data Centers have invested heavily in the region.

With its large workforce, competitive pricing compared to other countries, and its supportive government policies, Vietnam is a good choice for businesses looking to invest in data centers. As the market expands, companies must be aware of the risks and rewards to maximize their return.

Data centers require a significant amount of energy to keep pace with increasing demands, it's vital that providers have the right infrastructure in place. This includes making sure that they have a reliable and sturdy power supply, assuring that the environment for data storage is secure, and providing secure connections. These issues can be resolved with the proper plan and execution, but they should be carefully weighed against the potential benefits investing in this growing sector could bring. In Vietnam for instance the cost to build an data center with a capacity of 50 megawatts can range from $300 million to $650 million. This is a substantial portion of any company's IT budget and it's crucial to evaluate the pros and cons of the investment before making the final decision. If you need assistance with your project to build a data center, contact us for more information.

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