The growth of the public cloud and software business in Asia is not only expanding regionally but also exerting significant global influence on transformation. This development is supported by a combination of technical advancements, investments, and a rapidly growing digital economy.
The region, driven by prominent technology companies in China and a rapidly growing startup ecosystem in India, is asserting itself as a crucial force in the global technology sector.
Growth of Cloud Usage in Asia
According to the International Data Corporation’s (IDC) Worldwide Software and Public Cloud Services Spending Guide, the estimated value of public cloud services is expected to reach USD 219.3 billion by 2027. Additionally, on-premises and other investments will contribute another 30% of the total, which demonstrates the region's resiliency, but also emphasizes its deliberate reliance on technology to facilitate progress and innovation.
Currently, Asia is undergoing an unparalleled surge in IT spending. Public cloud services and investments in software are experiencing a significant and rapid increase, with a projected compounded annual growth rate (CAGR) of 14.2% anticipated over the next five years; a noteworthy growth considering the uncertainty in the global economy.
This increase in cloud service adoption is fueled by several factors. Companies are increasingly recognizing the benefits of cloud platforms such as adaptability, scalability, and cost-efficiency. Additionally, there's a rising demand for data analytics, cybersecurity, and artificial intelligence (AI) solutions, driving this upward trend. Businesses are investing heavily in cloud-based software, data analytics tools, and AI platforms to streamline operations, enhance customer experiences, and gain valuable insights.
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Asia: A Cloud and Software Powerhouse
The rapid growth of Asia's public cloud and software business is not only reshaping the region but also establishing new benchmarks on a global scale. Platforms such as the Huawei Cloud are leading the charge in advancing cloud technology, paving the way for future innovations. Concurrently, Jio's partnership with Google Cloud aims to revolutionize connectivity for over a billion Indians, enhancing their digital experiences through advanced 5G technology.
In Indonesia, Indosat's collaboration with Google Cloud is set to deliver AI-driven digital experiences, illustrating how partnerships are leveraging AI to drive digital transformation across Southeast Asia. Similarly, Bharti Airtel's alliance with Google Cloud focuses on delivering AI solutions to businesses, further fueling innovation and operational efficiency.
Meanwhile, Amazon Web Services (AWS) has committed SGD 12 billion to bolster Singapore's cloud infrastructure, underscoring its strategic importance in the global cloud market. In tandem, AWS has announced a USD 6 billion investment into Malaysia in the next 14 years to improve AWS' cloud services infrastructure in the country, as part of the company's broader strategy to expand its AWS Infrastructure Regions throughout Southeast Asia.
Moreover, Microsoft's significant investment in Malaysia underscores its commitment to advancing cloud and AI capabilities, positioning the country as a hub for technological innovation.
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Also pioneering an investment-focused approach, in 2023, NTT announced a USD 90 million investment in the development of its newest data center in Thailand, which broke ground last March. The new Bangkok 3 Data Center (BKK3) is set to be NTT’s largest data center in Thailand with an approximate IT capacity of 12 MW. BKK3, which is scheduled to start commercial operations in the second half of 2025, is designed to serve hyperscalers and corporations. The objective is to offer adaptable and expandable IT infrastructure, optimal power efficiency, and cost-effectiveness to accommodate large densities of up to 30 kW per rack.
In the Philippines, Converge and NAVER Cloud are jointly exploring opportunities in cloud services, aiming to meet growing digital demands in the country. Similarly, PLDT and Smart Communications' Cloud Center of Excellence (CCoE) aims to drive digital transformation and enhance service delivery through advanced cloud technologies.
In Hong Kong, HKT's adoption of 50G PON technology signifies a leap forward in telecom infrastructure development, enhancing connectivity and paving the way for future digital advancements. SmarTone's shift to cloud-based telecom operations further exemplifies the industry's move towards agile and scalable service delivery models.
Finally, Lenovo's focus on advanced hybrid cloud platforms and services underscores its commitment to elevating AI capabilities across Asia, driving innovation and enhancing business efficiencies in the digital era.
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Cloud Considerations
Although cloud utilization is becoming increasingly popular in the region, several companies are still reluctant to fully use it due to concerns regarding data security, network constraints, insufficient internal experience, and the cost of implementation. Nevertheless, cloud providers are actively addressing these problems by enhancing security protocols, upgrading network infrastructure, delivering training and assistance, offering multi-cloud alternatives, and introducing flexible pricing options.
The IDC Worldwide Software and Public Cloud Services Spending Guide has also shared insights on how industries can utilize cloud technology to enhance their operations. For example, in the banking industry, cloud technologies are employed to enhance customer experiences, optimize processes, and strengthen security. Financial institutions are utilizing data analytics and AI to obtain valuable information about client behavior, identify instances of fraud, and customize services to individual customers.
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Moreover, cloud technologies are revolutionizing the delivery of healthcare services by allowing healthcare providers to utilize cloud-based technologies to store and manage patient data, enable telemedicine services, and boost research and development (R&D) initiatives. These technologies are contributing to the improvement of patient services, optimization of operational efficiency, and reduction of expenses.
Meanwhile, in the telecoms sector, telcos are using cloud technologies to update existing networks, provide new services, and improve customer experiences. Telecommunication companies are able to implement and oversee networks more effectively, lower operating expenses, and enhance service quality through the use of cloud-based technologies.
Asia's rapid expansion in the public cloud and software business is making a significant global impact. The region's advancements in AI, large-scale data analysis, and remote data storage are setting new standards and enhancing global competitiveness.
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