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The Malaysia data center market size is forecast to increase by USD 4.55 billion, at a CAGR of 20.22% between 2023 and 2028. Market growth is contingent upon various factors, including the expansion strategies of hyper scalers, initiatives for digital transformation, and the rising demand from small and medium-sized enterprises (SMEs). Data centers serve as pivotal facilities housing computing, storage, and networking components essential for organizing, processing, storing, and distributing vast amounts of data. Enterprises heavily rely on applications and data securely stored within these centers, making them indispensable assets for daily operations. However, growth faces obstacles such as the requirement for substantial capital investment, mounting apprehensions regarding server security, and the imperative need for optimizing server workloads. Despite these challenges, the market continues to evolve, driven by the imperative role data centers play in facilitating seamless business operations and meeting the escalating demands of modern enterprises.
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The market share growth by the data center servers segment will be significant during the forecast period. Data center servers process the data, run the application, and store the data processed by the applications. The different types of servers currently used in data centers are rack servers, blade servers, tower servers, microservers, and Open Computing Project (OCP) servers. SMB accounts for a significant portion of rack server demand. Over the past five years, the data server infrastructure has grown significantly in Malaysia.
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The data center servers segment showed a gradual increase in the market share of USD 519.50 million in 2018. Due to investments in expansion and new facility construction, the market is expected to grow at a steady rate. In Malaysia, communication and colocation service providers are rapidly expanding their data centers. Major players will launch new data centers in Malaysia, which will drive the growth of the market during the forecast period.
One of the largest end users in the Malaysian data center market is the BFSI (Banking, Financial Services, and Insurance) industry. Customer information, transaction records, and financial documents are all extremely sensitive financial information handled by the BFSI industry. To ensure data integrity and provide security against online threats, a secure and reliable data center platform is required. Data centers provide BFSI companies with access to flexible and efficient computing resources. Owing to their flexibility, BFSI organizations can adapt quickly to changing market needs. In addition to enabling secure and efficient operations, they also improve the consumer experience by providing the infrastructure and services needed to handle growing volumes of data. Hence, the growing BFSI sector in Malaysia will drive the growth of the Malaysia - data center market in the BFSI segment during the forecast period.
In Malaysia, the data center landscape is evolving rapidly, driven by factors such as cloud services adoption and increasing digitalization penetration. Key players, including data center consultants and cloud service providers, play a crucial role in facilitating this transformation. With a focus on sustainability, the industry is witnessing a shift towards renewable energy generation to power data centers. Connectivity is paramount, with strategic locations in port cities leveraging submarine cables to ensure seamless data transmission. Data center operators in industrial estates and free zones offer a range of services, including colocation, managed hosting, and retail and wholesale colocation. These facilities boast strong IT infrastructure, comprising servers, storage systems, and network infrastructure, supported by reliable electrical infrastructure such as UPS systems and generators. Additionally, mechanical infrastructure, including cooling systems, chiller units, and racks, along with switches and switchgears, ensure optimal performance. As emerging technologies like AI, big data, and IoT drive demand for data processing and storage, Malaysia's data center market continues to expand, offering scalable solutions to meet evolving business needs.
Growing demand among small and medium-sized enterprises (SMEs) is the key factor driving the growth of the market. Malaysia's micro, small, and medium enterprises (MSMEs) are an integral part of the country's economy and are expected to be a key contributor to economic potential through digital transformation. Data collection provides a way to develop a more informed business approach. The use of effective data management and analysis tools offers a powerful opportunity to gain a business advantage through data-centric digital solutions. Cloud solutions provide flexible and cost-effective digital tools for businesses.
In addition, owing to the recent popularity of internet-connected devices and the growing demand for computing, microdata centers are likely to become more common in Malaysia over the projected period. In addition to SMEs, organizations in sectors such as retail, manufacturing, and banking are also expected to adopt these data centers. Therefore, the growing demand for data centers by domestic SMEs will drive the growth of the market during the forecast period.
The emergence of edge facilities is the primary trend in the market. Edge computing refers to the practice of processing data near the networks of the edge where the data is generated. Edge computing enables real-time processing of data generated near the source, allowing insights to be generated quickly. These advantages have led to an increase in the number of advanced IT solutions in Malaysia. Hence, the emergence of modern facilities will drive the data center market in Malaysia during the forecast period.
Server workload optimization is a challenge that affects the growth of the market. With the emergence of cutting-edge technologies in Malaysia, such as big data analytics and artificial intelligence, companies have begun to analyze large amounts of detailed data sets. As a result, enterprises and data center service providers need complex, high-performance servers to handle these workloads. Additionally, other areas of concern are Power production and physical space constraints in the data center as well as the unexpected increase in enterprise server capacity demand, which further exacerbates the complications problems.
However, server market players provide infrastructure management platforms that allow data centers to solve server optimization problems. As a result, a data center server cluster can only function efficiently and meet the current and future IT needs of Malaysian companies if they actively manage it with an infrastructure management platform. This may present a challenge for suppliers and will impede the growth of the market during the forecast period.
The Malaysia Data Center Market report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data, with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
The market in Malaysia is experiencing vital growth driven by factors such as digitalization penetration and the increasing adoption of cloud computing. The country's commitment to renewable energy generation further enhances its appeal to data center operators seeking sustainable solutions. With strategic locations in industrial estates and free zones, Malaysia offers excellent connectivity via submarine cables and attracts major cloud service providers. Investment in storage systems, network infrastructure, and electrical infrastructure ensures reliable operations, supported by advanced UPS systems and generators. Additionally, stringent physical security measures and disaster relief centers bolster resilience. As Malaysia progresses towards becoming a regional hub for ICT services, the data center market continues to thrive, attracting investments from sectors like banking and finance and retail and wholesale colocation.
Further, in Malaysia, the Data Center Market thrives, particularly in port cities, driven by strong switches and switchgears infrastructure and efficient cooling systems. Essential components like racks, chiller units, and cooling towers ensure optimal performance, while fire detection and suppression systems guarantee safety. The country's focus on mechanical infrastructure and core and shell development supports seamless installation and commissioning services and engineering and building design. With a Tier Standard in place, data center infrastructure management ensures reliability and efficiency. Enhanced renewable energy integrates with emerging technologies like AI, IoT, and 5G connectivity, empowering telecom operators to provide low latency services. Furthermore, the presence of edge data centers and submarine cable connectivity fosters cloud service adoption and managed hosting.
Market Scope |
|
Report Coverage |
Details |
Page number |
161 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 20.22% |
Market Growth 2024-2028 |
USD 4.55 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
16.57 |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Alphabet Inc., Amazon.com Inc., Bridge Data Centres, Cisco Systems Inc., Cummins Inc., Cyxtera Technologies Inc., Dell Technologies Inc., DXC Technology Co., Eaton Corp plc, Equinix Inc., Fujitsu Ltd., GDS Holdings Ltd., Hewlett Packard Enterprise Co., Huawei Technologies Co. Ltd., International Business Machines Corp., Legrand SA, Lenovo Group Ltd., Microsoft Corp., NEC Corp., NetApp Inc., Nippon Telegraph and Telephone Corp., Schneider Electric SE, and Vertiv Holdings Co. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the market forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by End-user
8 Customer Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
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