IT Pro is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Learn more

Podcast transcript: How Singapore became a data centre powerhouse

Read the full transcript for this episode of the IT Pro Podcast

Thumbnail for the IT Pro Podcast transcript for the episode titled: 'How Singapore became a data centre powerhouse'

This automatically-generated transcript is taken from the IT Pro Podcast episode ‘How Singapore became a data centre powerhouse'. To listen to the full episode, click here. We apologise for any errors.

Adam Shepherd

Hi, I'm Adam Shepherd.

Zach Marzouk

And I'm Zach Marzouk.

Adam Shepherd

And you're listening to the IT Pro podcast where today, we're taking a closer look at how one of the world's smallest countries became a data centre powerhouse.

Zach Marzouk

Singapore is a relatively tiny country measuring just 726 square kilometres in total. Despite its small size, however, the city-state has become one of the major hubs for innovation and digital technology in the Asia Pacific region, hosting 105 data centres and more than 500 cloud service providers.

Adam Shepherd

But what effects does such an enormous concentration of tech investment have on a country with a lower population than London? And what lessons can the rest of the world take away from Singapore's runaway success to improve data centre strategy elsewhere? 

So, Zack, you've done a lot of research and a lot of writing into Singapore's tech economy and to the Asia Pacific region as a whole. What's Singapore's tech economy like?

Zach Marzouk

Yeah, it's a fairly technologically advanced country, a mature market adopter of tech. For example, it's building up its 5G infrastructure, and it's looking to fully deploy that by 2025. Singapore is situated in the APAC region, it's essentially a key trading hub, and also a key APAC hub in general. So it's almost playing on its roots of how it used to be like a colonial trading outpost run by the British Empire. But now it's, it's kind of like flipped on its head, it's now very important in a digital aspect. For example, there are 4500 US companies based in Singapore, including many tech giants, but at the same time, you've got loads of important tech companies from China, who also base operations there to service the rest of the APAC region. It's kind of like a stepping stone, or a gateway, I guess, to the whole of APAC, for a number of reasons. I'll just give you an example: Microsoft right now is building a sovereign cloud for one of the government agencies.

Adam Shepherd

So that's resulted in a pretty large investment within the country in terms of data centre infrastructure, right?

Zach Marzouk

Yeah, for sure. So the government's attracted a lot of foreign companies. And as it expands, the sector, more and more data centres are required, as it's just essentially a critical data hub in the APAC region. So in 2018, the Singapore economic development board said that 80 of the top 100 tech firms in the world have a presence in Singapore. So that reinforces the idea that it’s a major east-west trading centre, and a gateway to the general APAC region, but this time digitally, and kind of linked to the government's policies. The government has been very proactive in offering technology companies incentives to base operations in Singapore, because that aligns with its economic strategies. So when it comes to data centres, it doesn't only benefit tech companies serving as critical infrastructure but also the Singaporean government. Its investment arm, Temasek party owns most of the undersea cables that come into the country. And they're critical to data centre operations, and also happens to be a major investor in tech companies. All this is saying about data centres from our latest feature piece on Singapore data centres. So if you want to deep dive into that, then I really recommend reading that.

Adam Shepherd

The incentives that the Singaporean government has put in place kind of reminds me a lot of some of the incentives that the Irish government has put in place for, what I imagine, are similar reasons to the Singaporean government in terms of the more major tech companies that have strong footprints in the country, the more jobs that brings-in, the more kind of revenue that brings in, the more it stimulates the economy. And also the more it convinces other tech companies to follow suit. And eventually, presumably, you get this sort of snowball effect, right? Where any tech company, who is anyone has to have an office in these places.

Zach Marzouk

Yeah, that's pretty interesting, actually, because I think Ireland is the other country that's imposed a moratorium on building data centres as well as Singapore. I know Singapore's imposed its moratorium because it wants to make its data centres more energy-efficient and green. I'm not sure about Ireland.

Adam Shepherd

So tell us a bit more about this moratorium, because for those who aren't familiar with the ins and outs of the Singaporean data centre market, this may be a bit of a surprise,

Zach Marzouk

For sure. So, Singapore imposed a moratorium on the construction of data centres in, I think, 2019, which basically meant that it temporarily halted the construction of these buildings, and infrastructure. The reason for that was because obviously as Singapore has to be very careful with the way it manages its land, and also its energy. And data centres require both land and a huge amount of energy. And Singapore has very limited supplies of both. To add to this, it also has like third-highest population density in the world, with a population of around 5 million, and a land area of 700 square kilometres. And also, its contribution to global carbon emissions is over 200 times greater than the percentage of its land area among global territories, with data centres, accounting for around 7% of US electricity consumption in 2020. So we are always calling it a microcosm of the challenges that countries face when they have to balance building data centres with also meeting their climate change goals. And going ahead, the country's gonna have to be developing policies where data centres are more green, in order to keep up with the huge demand that the tech companies based in the country are placing upon that infrastructure.

Adam Shepherd

So let's talk about the energy concerns that this brings up. What are the main kind of constraints in terms of the energy consumption, because presumably, there's a limit to how much energy the country of Singapore as a whole can generate? Right, especially with the land constraints that they're under?

Zach Marzouk

Yeah, I don't believe it has any kind of renewable energy, I think it imports a lot of gas from near its neighbours. But currently, I think it's trying to build a cable from Australia to Singapore, something called a solar cable to try and get more renewable energy that way. But at the same time, it's just putting a lot of pressure on its energy infrastructure. And if it keeps building data centres without taking that into account, I assume it's going to might end up in some kind of problems going ahead in the future, which is why the government stops the building of data centres.

Adam Shepherd

Yeah, because as we covered in our previous episode on building green data centres, the energy consumption piece is, I think, very easy to get out of hand, it's, it's very easy to let that kind of spiral and data centres, you know, per square foot, surely have to be among the most power-hungry pieces of kind of infrastructure, if you like, that a country can build. It's an enormous amount of energy consumption, especially for your country with no real renewables. And, you know, given the things that are happening in sort of wider energy markets, that must be an enormous concern.

Zach Marzouk

For sure, and I think the introduction of this moratorium wasn't only to give the government time to think of policies, but it was to signal to the wider industry. Hey, we're quite serious about this issue. We're not gonna go any more data centres until this is under control. So three years on now in 2022, and the government hinted at the start of the year that the moratorium is soon going to be lifted. Once it publishes new rules that are going to place strict energy efficiency requirements on all new data centre sites. We don't know what those look like yet. I think they're still talking with the industry about those requirements. But I'm hoping that they'll release them soon.

Adam Shepherd

So let's dig a little bit deeper into how the development of this kind of super widespread data centre infrastructure has affected the country itself, we've already talked about how the energy supply within the country and the sort of internal energy market has been upended by this real explosion in data centre production. But are there any other impacts that it's had on the country itself?

Zach Marzouk

Well, I assume it's helped the country become more technologically advanced and being able to have tech companies there now helps with the technological investment of Singapore. But then also if you situate your company in Singapore helps you expand to the nearby region. So obviously, thankfully you have the time zone which will help you communicate with, I don't know, if you have your offices in Europe that helps you communicate with your offices are there. If you're based in Singapore, then you have the whole Asia market you can expand into. And those companies, I assume we're going to continue to invest in Singapore, which will help the market continue to expand. I don't know how the market has been affected by halting the construction of data centres, if that's placed a pressure on those companies will slow down the growth is something we have to look into.

Adam Shepherd

Yeah, I think it's also interesting to look at it kind of almost from a chicken and egg perspective. Do you think it's predominantly the proximity to that kind of Asian market that has given Singapore its kind of real, real draw? Or is it that kind of combined with other factors like the kind of, you know, incentives and tax breaks and whatnot that the government is offering? You know, as well as potentially things like access to talent, maybe? What are some of the kind of big factors at play, do you think?

Zach Marzouk

Yeah, I think it's this policy that the government's implemented over the past few years of just investing heavily into the sector into technology. I'm not sure how far back it goes by now that currently, technology is something very big for the country. And Singapore is facing a talent shortage like other countries in the world. But it's hoping to strike a balance between hiring foreign workers and its domestic workers. And it's trying to upskill domestic workers. But I think it has to strike a balance between ensuring that it doesn't abandon its tech industry. But at the same time, it can try and upskill its domestic workers as fast as possible. But you see that that's a problem you get in a lot of places like Australia as well. But I think ultimately, it's down to the government's investment. And the way it's just prioritise the tech sector because it's recognised how important it is for the country's future growth and success.

Adam Shepherd

So how has the government used the sort of capital, if you like, economically speaking from this boom in tech interests and data centre interest to reinvest in the country's digital economy? 

Zach Marzouk

Yeah, it's a great question, um, in 2019, and launched something called a master plan, which is going to guide its development over the next 10 to 15 years.

Adam Shepherd

So it sounds vaguely sinister.

Zach Marzouk

Maybe I don't know! No, it's to guide the development of land and property, and is set to be reviewed every five years. But as part of the latest plan, it also is going to develop new areas, which include a focus on technology. So it has something called a Northern Gateway, which is a new part of the city, and companies in the agri-tech, and food, just digital tech and cybersecurity sectors are going to be based there is also going to develop a Punggol Digital District, which is an area designed to let industry and academia intermingle by sharing each other's work spaces and facilities. Lastly, is also going to develop the Jurong Lake District in the western gateway, which is going to be the premier high tech manufacturing hub made up of the Jurong Innovation District is going to be fully complete by 2030. And includes a focus on technology, and the government's hoping to attract new businesses to the area, but there aren't a lot of details about that. So essentially, it's investing in its land and in the tech industry in general, by making space available to businesses and you know, we already talked about how important land is I think the statistic is that since its independence in I believe 1965 Singapore has grown its landmass by 25% by essentially importing I think sand and building out

Adam Shepherd

What? That’s bananas. Singapore has grown its landmass?

Zach Marzouk

I think so. Yeah, it is quite a big project.

Adam Shepherd

They’re literally investing in land? More or less? Yeah, that's I didn't even know you could do that. You can just build more land?

Zach Marzouk

Yeah, I think is a little bit polemical, because there are I believe his neighbours maybe impose a ban on Singapore buying sand from them.

Adam Shepherd

Yeah. I'm kind of not surprised. Like, if one of your neighbours was just like, expanding their borders, and just kind of adding more kind of mass. I feel like that would make me twitchy as well. That's crazy. I mean, I knew, I knew that places like Japan had built sort of artificial islands for airports and things like that. But as far as I'm aware, those are fairly kind of small scale projects, I had no idea something on this kind of scale was even feasible. That's, that's crazy. That idea of investing in dedicated innovation spaces and sort of business spaces is something that we've seen a lot before. Indeed, the UK Government has done that a number of times with the kind of so-called Silicon Roundabout area was envisaged as that sort of thing. And the Here East sort of Innovation Centre type thing at the Olympic Park in East London, does a very similar thing. That's where locker is based the cybersecurity startup accelerator type thing. So there's, it's something that has a proven track record, and will hopefully be a positive environment for the country's startups to flourish because presumably, the Singapore government is trying to enable as much of its own kind of homegrown tech scene as possible, as well as attracting kind of outside companies and outside investment. Presumably, they want to be growing their own kind of internal success stories.

Zach Marzouk

Yeah, for sure, it does have its own startup programme, called Startup SG, which I believe was created in 2017, which aims to showcase Singapore's startup ecosystem both locally and overseas. And it tries to boost startups by ensuring that partners can more easily discover and access support, and then also launched the startup SG network in 2018, to help tech startups profile and expand their opportunities for growth. And then it lastly also helps companies list themselves on the Singapore stock exchange by providing a grant for equity market in 2019. So yeah, it's really, it's really keen on helping homegrown talent. 15 out of 35 unicorns in the South East Asia region also originated in Singapore in the last two years. So it is investing in these companies.

Adam Shepherd

So what does the future look like then for Singapore's tech industry?

Zach Marzouk

Yeah, I think first, the tech industry is going to have to look at how the new green policies that the government introduced affect data centres and whether it has any effect on their growth. But essentially, I think it's going to be a fairly strong player in the APAC region purely because it's invested so much money into being this kind of player. On the other hand, part of the reason of why the country is introducing these green policies is that the consequences of climate change in Singapore could be quite severe. That includes extreme rainfall, flooding, extreme heat events, sea level rise, and decreased labour productivity. So Singapore is quite low-lying. So if climate change, you know, this happens occur in the next 20 years, 20 to 40 years, it could end up flooding completely. So as a part of an effort to combat that, the country's announced a plan for a higher carbon tax, that will affect tech companies by encouraging them to reduce emissions through innovation and energy efficiency, while also hoping to spur companies to be like less carbon intensive. So I think tech companies need to be aware of the green policies that might affect them in the future.

Adam Shepherd

What sort of incentives or support I guess, are there for companies that want to, particularly data centre operators, that want to pursue things like renewable energy sources, and kind of broader efficiency measures beyond minor tweaks? Are there any mechanisms on a kind of policy level to help encourage that?

Zach Marzouk

I'm not sure if there are any policies available. I know that, like renewable energy isn't very big in Singapore. So maybe those policies will be developed in the future once the solar cable’s installed. But right now, I think it relies on like gas imports for a lot of its energy. So yeah, be interesting to see whether the government does introduce that.

Adam Shepherd

I think it's interesting that there haven't been more All renewable tech startups trying to solve this problem, because for an island nation, you would think that, for example, wind power would be - wind power and hydropower would be something that Singapore would be very aggressively pursuing - both in terms of reducing its reliance on energy imports from other countries, but also giving them a kind of real advantage in that tech space, you know, if they could potentially even start selling their own excess renewable energy to other countries? And is that something that has the potential to be a differentiator for organisations do you think?

Zach Marzouk

Yeah, for sure, I think if there's some way to increase the amount of renewable energy Singapore can use they will definitely try and take advantage of that. And I'm sure the government's probably like looking at that right now. One startup I wanted to mention, however, is that there's a startup called I think it's called Kepler, which is building a floating data centre, which is essentially almost like a boat with a data centre on it.

Adam Shepherd

I like a weird data centre.

Zach Marzouk

It goes back to the way the land’s imported to Singapore.

Adam Shepherd

Didn't Microsoft experiment with a submerged data centre?

Zach Marzouk

Oh, I remember reading that story a while? Yeah. Yeah.

Adam Shepherd

I think either last year or the year before, Microsoft did a similar thing where they stuck a data centre, I think it was in like a shipping container or something not unlike it, and just did an experiment to see if they could run a data centre from the ocean floor. Is that a kind of similar sort of project to what Kepler is looking like?

Zach Marzouk

No, I think Kepler are building one on the surface of the ocean. I had a look at the diagram and it looks like a boat. That was like connected to another boat. I'm not. I'm not sure if it's been developed, or if it's still like in the early stages of design.

Adam Shepherd

Yeah, it'll be really interesting to see kind of how that catches on. I was. I was talking to a colleague from Datacenter Dynamics a couple of weeks ago, about the idea of running a data centre on an oil rig-type platform. And whether or not that's, that's something that might be a feasible solution to land challenges, and to sort of space availability challenges, because that's one of the biggest factors affecting data centre companies and Datacenter production at the moment, I think, is just the ability to, to get hold of enough land and enough infrastructure to run it.

Zach Marzouk

Yeah, for sure. Maybe Singapore will start to look at that. I don't know what the challenges are with having that, you know, looking at located on an oil rig platform, I assume you need to make sure that engineers can get in there to fix anything. And that, you know, all the cables are fine, you know?

Adam Shepherd

Yeah, it's kind of the biggest challenge, I think, would be one of availability, and particularly availability of components. You know, if you're on an offshore platform, it's going to be a challenge to get replacement parts out. Which obviously, is a problem if you're running services that are sort of high availability and need to be up for you know, like nine nines.

But leaving aside offshore data centres and oil rig platforms, are there any lessons that the wider tech industry can take away from Singapore's approach to data centre infrastructure and data centre investment, do you think?

Zach Marzouk

Yeah, for sure, I think once the new policies come out, the tech industry she might examine how Singapore is approaching data centres. However, I think it'd be more important for other countries governments to examine. I guess Singapore can kind of move a little bit faster when it comes to implementing policies just because it's slightly smaller. And also, the government has more control over land is the biggest landlord in the country and the economy than most other countries do. However, it might, other countries might be looking at it to see what kind of changes it's introducing just because it's so important for Singapore to bring in these green policies right now, before climate change gets out of hand in the future. And it could be better if countries collectively agree on regional or global regulations and standards to ensure everyone's moving as one to address the environmental impacts of data centres. Maybe there Singapore could be like a shining light, but we'll have to wait and see what the As policies are once they're released

Adam Shepherd

Do you think, and this is something that we've spoken about previously on the pod, do you think that Singapore presents an argument for centralising data centre capacity? So rather than having, you know, multiple, medium-sized data centres being run by different providers, do you think there's an argument for having one enormous data centre with kind of sub tenancies within that?

Zach Marzouk

I've never heard about that before. But I like the idea. Just having one like, gigantic area for data centres in the country.

Adam Shepherd

Yeah. So yeah, just have an enormous, you know, city-sized data centre, essentially, and then have all of the data centres within that. Does that cut down on the kind of cooling requirements? Does that introduce kind of more efficiency to the overall process? Or is it not worth the effort of kind of something that would be a massive construction project?

Zach Marzouk

I guess it might be more efficient for companies if they just grew up on the data centres in one place. On the other hand, it could provide a challenge when it comes to for example, if it's a power cord or something, and those data centres go out,

Adam Shepherd

Yeah, it is a single point of failure which is never super advisable in networks, particularly if it's an entire country's data centre infrastructure.

Zach Marzouk

For sure, but yeah, I never really thought about that before. Let's get something to think about.

Adam Shepherd

Hmm. Well, on that note, I'm afraid that's gonna be all we've got time for this week. 

Zach Marzouk

You can find links to all of the topics he spoke about today in the show notes and even more on our website at itpro.co.uk. 

Adam Shepherd

You can also follow us on social media as well as subscribe to our daily newsletter.

Zach Marzouk

Don't forget to subscribe to the IT Pro podcast wherever you find podcasts. And if you're enjoying the show, leave us a rating and review.

Adam Shepherd

We'll be back next week with more analysis from the world of IT but until then, goodbye.

Zach Marzouk

Bye!

Featured Resources

Accelerating AI modernisation with data infrastructure

Generate business value from your AI initiatives

Free Download

Recommendations for managing AI risks

Integrate your external AI tool findings into your broader security programs

Free Download

Modernise your legacy databases in the cloud

An introduction to cloud databases

Free Download

Powering through to innovation

IT agility drive digital transformation

Free Download

Recommended

Podcast transcript: Solving SMB challenges through tech
SMB

Podcast transcript: Solving SMB challenges through tech

13 May 2022
Podcast transcript: How to scale a tech platform
software development

Podcast transcript: How to scale a tech platform

6 May 2022
Podcast transcript: Building a smart factory
Internet of Things (IoT)

Podcast transcript: Building a smart factory

29 Apr 2022
Podcast transcript: Is planned obsolescence real?
Hardware

Podcast transcript: Is planned obsolescence real?

22 Apr 2022

Most Popular

FCC commissioner urges Apple and Google to remove TikTok from app stores
data protection

FCC commissioner urges Apple and Google to remove TikTok from app stores

29 Jun 2022
Former Uber security chief to face fraud charges over hack coverup
data breaches

Former Uber security chief to face fraud charges over hack coverup

29 Jun 2022
Internet providers look to ease cost of living crisis with cheaper broadband
broadband

Internet providers look to ease cost of living crisis with cheaper broadband

29 Jun 2022