- 7 months ago
Data is the new oil but who’s building the pipelines? In this episode of ASEAN KITA, we speak to Equinix Asia Pacific President Cyrus Adaggra on the region’s booming data centre race, what powers site decisions, and how Southeast Asia can build a secure, sustainable digital backbone.
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00:00Hi, good morning. I'm Amir Aiman and you're watching ASEAN Kita, a show where we explore
00:11the stories, challenges and opportunities that lies within the region. So in today's episode,
00:16we zoom in on the fast-growing world of data centers and the critical role they play in
00:21powering Southeast Asia's digital economy. As more governments push for digital transformation
00:27and businesses move workloads to the cloud, the need for secure, high-speed, interconnected
00:33data infrastructure has never been greater. But what does that mean for cities, for talent
00:38and for sustainability? Joining us from Equinix, one of the world's leading digital infrastructure
00:45providers is Cyrus Adagra, President of Equinix Asia Pacific. Thank you so much, Cyrus, for
00:51joining us today. Let's get right into it. So carrier-neutral data centers are often called
00:56the modern ports of Southeast Asia's digital economy. Could you help us understand that
01:03comparison a bit more? Why are these facilities now considered just as vital as seaports or
01:09airports for enabling trade for this region? Hi, Alila, and thanks for having me on the show.
01:16Yes, look, today's economy is a digital-first economy. And just like goods flow through airports
01:21and seaports, data now essentially flows through carrier-neutral data centers. These hubs are
01:28where networks, clouds, platforms, and enterprises meet and exchange traffic and essentially collaborate
01:35and partner with each other. In Southeast Asia in particular, where cross-border trade, cloud
01:41adoption, and AI you see just really surging, these neutral hubs are the critical gateways enabling the digital
01:49economy. They enable businesses to scale quickly, to reach new markets, and connect globally with low latency
01:56and high reliability, all without being locked into a single telecommunications or cloud provider.
02:02At Equinix, for example, we operate more than 270 data centers. We operate in 75 metros and in 35 markets
02:10across six continents. We serve as the digital equivalent of international airports, where data is exchanged
02:18between different customers. In the same way that an international airport serves as a central hub, where passengers
02:24and goods from different places converge, connect and transfer to different destinations, Equinix operates data
02:32centers in that manner to serve the same purpose for data. So whilst most people take it for granted, there's really a
02:39complex series of interactions that need to happen to make everything work. From browsing the web, to online shopping, to
02:46powering financial markets, Instagram, or even Netflix, all of these digital interactions happen
02:53in Equinix data centers. Cyrus, Equinix already operates in Singapore, Jakarta, and Kuala Lumpur, and also
03:00Johor Bahru, and now you're expanding into the Philippines. When you're considering entering a new market, what's the first
03:06and the most important thing you look at? Is it power pricing, maybe perhaps policy clarity or demand or something else entirely?
03:15So at Equinix, we put customers at the center of everything we do. And so our number one driver when we think about new markets is
03:22always customer demand. It's the first signal we look for. And it's the primary signal we look for, especially from our global and regional customers, who want to expand into new metros.
03:32But for us to act on that demand, we need three critical conditions to align. Firstly, there has to be reliable power and land. There has to be robust connectivity, so fibre, and long-term economic viability of that market, which essentially is economic growth.
03:52So we also consider how a market fits into our broader Southeast Asia strategy. For example, in the Philippines, which is one of the region's fastest growing digital economies, cloud usage is increasing very dramatically.
04:06There's strong demand for AI-ready infrastructure, and a large developer and enterprise base. And that made it a natural next step in the evolution of Equinix's Asia-Pacific strategy.
04:18And so specifically in the Philippines, the digital economy there last year reached over US $445 billion.
04:25It accounted for almost 10% of the country's gross domestic product. And the country is experiencing a surge in demand for digital infrastructure, driven by a highly engaged digital population, a booming e-commerce market, and various government initiatives at promoting digitization, such as the National Broadband Plan and the Digital Philippines Campaign.
04:47And so when we entered the Philippines market, we did it with the support of Equinix's ongoing global expansion, the strength of our leadership position in the Asia-Pacific region, and it presented opportunities to expand into new markets, new market segments in the Philippines.
05:04And then finally, we also have a support services hub in Manila, with more than 220 employees, driving service delivery and technical excellence across the region and across the globe, across all of our operations.
05:19And we're also seeing a push from smaller cities like Penang, Cebu, and Denang to attract data center investments.
05:26What tells you that an aged metro is truly ready for a facility? Is there a threshold in population size or cable landings or perhaps enterprise density that tips the scale into this favor?
05:41So it comes back to the three things that I said previously. When we look at a new metro or a new country, we essentially look for, first and foremost, customer demand signals.
05:52Customers are at the center of everything we do, and so we talk to our customers on a constant basis, and they tell us about their growing needs in these new markets.
06:04We also do a lot of market research, so we understand from local enterprises, as well as cloud providers and other digital platforms that require low latency, localized contents delivery, or even compliance with data residency requirements.
06:19And so all of those customer-related data demand drivers impact on where we go and when we go there.
06:28The second thing that we look for is network density and strategic fiber connectivity.
06:34So what that means in plain English is that we need to know that there are multiple network service providers or direct fiber routes that connect to a major regional hub.
06:43So edge locations, for example, in Malaysia, we would want them to connect back to Singapore, but Malaysia also has a number of local telco providers.
06:56So without that underlying network fabric, data centers are essentially just islands, and if you're an island, you can't deliver the performance or the resiliency that our customers expect, and so strong network density is a must.
07:09And then finally, regulatory clarity and infrastructure readiness.
07:16So we need reliable, scalable access to power.
07:21Essentially, we are providing connectivity, space, and power to our customers, and so power is an absolute must.
07:27And so with power obviously comes land, so we need to assess the land availability, the zoning laws, the environmental permitting, and alignment with national digital infrastructure strategies.
07:42So cities that offer clear, supportive frameworks for interconnectivity, for power, and for land, as well as fiber, are the drivers of when we go to a new edge metro.
07:54And we're seeing new edge metros evolve beyond just mere satellites to core cities.
08:01Malaysia is a good example of where the edge is spreading to in Kuala Lumpur.
08:06But we've also invested heavily across strategic ASEAN markets to help businesses meet the demands of AI and digital transformation.
08:14So most recently, we entered the Philippines by acquiring three data centers in Manila.
08:19We completed a new phase in KL, KL1 Phase 2, and a new AI-ready data center in Jakarta.
08:29We've also announced an intention to invest half a billion US dollars in Thailand in phases over the next decade, including a recent land acquisition for just over $30 million.
08:40And so we now have a strong presence in Singapore, Malaysia, Indonesia, the Philippines, and an upcoming entry into Thailand, which will all allow businesses to interconnect and exchange data across the ASEAN region.
08:55And Cyrus, governments across ASEAN are rolling out perhaps tax holidays, land grants, and even fast-track permits to WU operators.
09:03In your view, which of these incentives actually moves the needle the most when it comes to return on investment ROI?
09:12Sure.
09:13So look, the governments in Southeast Asia have been actually very proactive in accelerating digital infrastructure development.
09:20So a good example of that is the formation of the Johor-Singapore Special Economic Zone,
09:25which helped create a digital corridor that facilitates real-time cross-border data flow, supporting industries that are reliant on low-latency applications, such as fintech, healthcare, and even advanced manufacturing.
09:40In the Philippines, there are various government initiatives to promote digitalization, such as the National Broadband Plan and the Digital Philippines Campaign.
09:48And then the Southeast Asian region's digital economy is on track to reach over $600 billion in gross merchandise value by 2030.
09:57To support that growth, the region requires really robust digital infrastructure as more businesses integrate AI into their operations.
10:06And so we are accelerating the development of AI-ready digital infrastructure through significant investment and expansion in Malaysia,
10:13the Philippines, Indonesia, Singapore, and Thailand across all of APAC.
10:18But to answer your original question, yes, tax holidays are helpful, land grants are helpful, fast-track permits are helpful,
10:26but ultimately the biggest driver of ROI for us is customer demand.
10:31And so we will go where our customers require us to be, so long as those three critical elements of power, land, and fibre are available.
10:42Well, there's a lot to unpack on the fast-growing world of data centres
10:46and the critical role they play in powering Southeast Asia's digital economy with Cyrus Adagra, President of Equinix Asia Pacific.
10:53But we'll take a short break. We'll be right back after this.
10:57Welcome back on ASEAN Kita, where we're still with Cyrus Adagra of Equinix to unpack on the fast-growing world of data centres
11:19and the critical role they play in powering Asia's digital economy.
11:24So Cyrus, we've seen an uptick in data localisation loss, particularly in countries like Indonesia, Vietnam, and Thailand.
11:32So from Equinix's perspective, do these fragmented rules make regional integration harder,
11:38or are they simply creating more localised demand for your services?
11:44So that's a great question.
11:46It's quite complex because the volume of data that enterprises need to manage continues to grow exponentially
11:53as regulations around data locality, residency, and sovereignty simultaneously continue to multiply across multiple jurisdictions worldwide.
12:04And this essentially drives local demand for data centres.
12:08Companies have to be vigilant about keeping up with rapidly evolving national and regional policies
12:16around who can access specific data, how it's collected, processed, and stored,
12:20and where it's accessed from or transferred to.
12:23And it's getting more and more complicated every day.
12:26Because data-reliant applications like artificial intelligence have become prevalent,
12:32effective data governance is essential to ensuring transparency and compliance with emerging regulations.
12:38And this means that customers need to consider what's required to access the data,
12:43knowing exactly which path the data will flow to its destination.
12:46And before they can establish data governance policies, businesses need to understand local laws
12:52and how those laws impact where they can generate, collect, and store data.
12:57The good news is that Equinix's AI-ready data centres are strategically located in the world's most connected markets,
13:03and we provide a scalable infrastructure foundation that enterprises can use to advance their AI capabilities.
13:10As I mentioned before, we've got over 270 data centres around the world,
13:14and our global portfolio allows customers to place, interconnect, and securely govern their data anywhere in the world.
13:22And we offer the only global platform with different types of data centres,
13:26a dense ecosystem of clouds and service providers, as well as on-demand virtual interconnection services.
13:33And Cyrus data centres are often criticised for being power and water intensive.
13:40Could you share Equinix's latest regional performance when it comes to power usage effectiveness and water usage effectiveness as well?
13:49And what measures are being taken to bring those numbers down over time?
13:54Sure. And so at Equinix, sustainability is a core part of our strategy.
14:00We're committed to operating efficient, low-impact data centres across Southeast Asia and the world.
14:06So to share some stats with you, in 2024, our average annual global power usage effectiveness was just under 1.4,
14:15with newer upgraded sites in Asia trending even lower than that.
14:19Our global water usage effectiveness was 0.95, reflecting our efforts to both optimise cooling and reduce water use in our data centres.
14:30But to improve these metrics, we're investing in new technologies like liquid cooling, direct-to-chip or rear-door heat exchangers,
14:39which enable even better performance with less energy and water use.
14:43We're also incorporating AI into our operational controls to optimise the cooling based on real-time load and climate data.
14:51We also have heat reuse systems in select sites to redirect waste heat for local benefit.
14:58For example, in Amsterdam, one of our sites actually heats a local university.
15:04And we also design all our new data centres, including AI-ready facilities in Jakarta,
15:11with energy usage and sustainability certifications as our number one priority.
15:16We invested over $50 million just in energy efficiency improvements in 2024,
15:22resulting in a 6% year-on-year improvement in our power usage effectiveness across all of our operations.
15:29And I don't need to tell you, in Southeast Asia's really tropical climates, this becomes an even higher challenge.
15:37But we continue to pilot advanced technologies that balance thermal efficiency, renewable energy use and water conservation
15:46to align with our corporate net zero goals and local sustainability regulations.
15:51Power and water intensive has been an issue, but also talent is a recurring team across Southeast Asia,
15:58particularly in engineering and infrastructure.
16:01So how is Equinix approaching the challenge of recruiting, training and retaining skilled data centre professionals in the region?
16:10Yeah, so we have talent development as a core priority at Equinix.
16:15We need talent to both scale our operations across Southeast Asia,
16:19as well as all of the digital economies across the globe.
16:22So we work with local universities, with vocational institutions and workforce boards to build long-term talent pipelines.
16:32We use internships and graduate hiring programs tailored for critical infrastructure roles at our data centres.
16:40We're focused on making the data centre industry more diverse, more inclusive,
16:44with talent initiatives aimed at both underrepresented groups and underrepresented minorities.
16:51In markets like the Philippines, Indonesia and Malaysia,
16:54we are localising our hiring and training efforts to reflect the community's needs
16:59while aligning with our global standards of operational excellence.
17:03We're also exploring strategic reskilling partnerships to support career switching into data centre fields
17:09from adjacent industries such as telecommunications, utilities and engineering.
17:14And so we take a holistic approach, not just to bringing people into Equinix and into the data centre industry,
17:20but training them for life.
17:23And Cyrus, on the hard way front, the Trump era technology tariffs are expected to raise costs on critical server and networking equipment.
17:33How are those tariff pressures affecting your CAPEX in Southeast Asia?
17:37And what's the strategy here for managing or minimising that cost impact?
17:42So this is obviously an evolving situation,
17:45but at the moment we don't expect a significant near-term impact in ASEAN
17:50due to our diversified global supply chain and strategic sourcing approach.
17:55We've already pre-purchased over half a billion dollars of critical components and sub-assembly inventory.
18:02We've staged it across lots of different locations,
18:07supplying deployments in ASEAN through all of 2025, 6 and 2027.
18:13The largest cost pressure from tariffs is probably like to hit us in the lithium-ion batteries,
18:19but they only represent a very small fraction of our overall data centre build costs.
18:25And we prioritise sourcing from local and regional manufacturers in ASEAN,
18:31where quality and performance standards can be met, which also helps to mitigate the tariff exposure.
18:37And then finally, we're continuously evaluating opportunities to migrate our supply chain
18:44into ASEAN countries to optimise costs and reduce geopolitical risk.
18:50And then at Equinix, we essentially actively monitor these tariff developments.
18:55And because it is a fluid situation, we try to make sure that all of our raw material availability
19:01is on a consistent basis to ensure resilient, cost-effective builds across all of our markets.
19:08And so I was looking ahead to 2030.
19:12How does Equinix see the data centre map of Southeast Asia evolving roughly?
19:17Perhaps how many metros are you planning to recover by then?
19:19And do you foresee a more connected, integrated grid or a patchwork of country-by-country builds?
19:26Sure. So I think by 2030, we envision a Southeast Asia where digital infrastructure is deeply integrated across borders,
19:34enabling faster, more secure and more seamless data exchange between economies.
19:40Rather than fragmentation, we actually expect to see greater alignment and connectivity,
19:45especially as governments, enterprises, cloud providers prioritise digital transformation at scale.
19:51And so our vision is not one of number of metros,
19:56but rather to support a highly integrated digital ecosystem in Southeast Asia
20:01by interconnecting all of our facilities in the region,
20:05which will enable enterprises, cloud providers and networks to connect across borders to power AI,
20:12the power of the AI revolution, cloud adoption and digital first operations.
20:18I think we'll also continue to expand our presence strategically
20:21across both of our established core hubs, as well as emerging new metros.
20:27Our goal isn't just to be present in more locations.
20:30It's, as I say, to build a cohesive, interconnected platform that supports the region's evolving needs
20:36across various sectors, as well as the government.
20:41And while infrastructure maturity varies by country, Equinix is building a unified regional platform that supports consistent customers' multi-metro deployments
20:51with consistent performance, compliance and sustainability standards.
20:55We're investing in infrastructure that empowers customers to scale regionally with confidence,
21:00whilst meeting local compliance and sustainability and performance expectations.
21:05And so we see Southeast Asia's digital landscape continuing to evolve,
21:09but it becoming more connected, more collaborative and more critical to global innovation.
21:16Finally, Southeast Asia's diversity is a strength.
21:20And at Equinix, we're committed to providing localised support alongside global scalability to help our businesses here and across the world grow with confidence across the entire region.
21:30Cyrus, I want to bring this composition to a bit more personal lens on your side.
21:36So you spent quite some time in digital infrastructure across several continents.
21:42What originally drew you to Equinix and what keeps the role exciting for you in the Asia-Pacific market?
21:50Yeah, so look, I was drawn to the data centre industry and Equinix in particular purely from the ability to have impact.
21:59We run the biggest, largest global data centre platform on the planet.
22:04And what we do every day is help people to connect.
22:08We help people to live their lives, to learn, to grow, to work and to play.
22:15And it's an amazing feeling being part of a business and an industry that's helping people all across the globe and powering the economies of many, many countries.
22:26And then Equinix talks a lot about its magic culture internally.
22:31If you had to describe that culture, what would it be and why?
22:35Sure. So one of the things that struck me when I first joined Equinix was just how collaborative our company was.
22:43Everywhere I went, no matter what city, no matter what data centre, colleagues constantly wanted to reach out and to help you on your journey at Equinix.
22:54And that feeling of being welcomed into a family, being supported, it is genuinely a magical feeling.
23:02And so the way I describe it is coming to a family and just a really collegiate and collaborative workplace.
23:09And Cyrus, I think this is my final question for you is running, I know running a region as diverse as APAC means juggling very different market realities.
23:20How do you overcome this type of challenges? How do you manage to steer your team into becoming the Equinix that they are today?
23:27Sure. And so one of the things that I'm always very keen to reinforce with people is that we operate as a region, but we execute locally.
23:38And so understanding the nuances in Australia versus Singapore versus Japan versus Southeast Asia, Thailand, the Philippines, Indonesia is really critical to success.
23:51You can't take a cookie cutter approach to how you execute in these markets.
23:58And so spending time in the markets, understanding the nuances, understanding what our customers need in those markets is critical to our success.
24:08And so that's what we do. We think globally, we execute locally.
24:13We'd like to thank Cyrus Adegra, President of Equinix Asia Pacific on his insights on the fast growing world of data centres and the critical role they play in powering Southeast Asia's digital economy.
24:24And that brings us to the end of this episode and also my final one as the host of ASEAN Kita.
24:29It's been a privilege to unpack these stories, challenges and opportunities that lies within the region.
24:35I truly hope these conversations have helped spark understanding and reflection about Southeast Asia's heading.
24:42And while I may be signing off, the show will go on with new voices, new perspective and more stories that matters.
24:49Thank you for the trust, the time and for tuning in. I'm Raman signing off for one last time on ASEAN Kita.
24:55Take care and goodbye.
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