Data Center From the Trenches: Issue 1

James Soh. First published on 20th of August, 2025.

In this newsletter, I revisit and build upon insights first shared in my March 2017 rticle, From the Trenches. Since then, the Asian data center landscape has evolved rapidly, bringing new challenges and opportunities. Drawing from ongoing projects and fresh market developments, this issue offers practical, ground-level perspectives to help you with dealing with today’s fast-growing data center ecosystem.

1. Introduction

Building data centers in Asia has always been a complex and dynamic challenge. Since my original reflections in 2017, the landscape has evolved rapidly, and fresh lessons have emerged from ongoing projects and market shifts. This newsletter shares practical, ground-level insights from real-world experiences navigating Asia’s fast-growing data center sector.

2. Budget Constraints and Regional Nuances

Budget realities remain a critical factor in data center projects throughout Asia. Since 2021, global supply chain disruptions have significantly increased procurement costs for critical components such as servers, cooling systems, and electrical equipment. In countries like China, fixed budgets continue to strain quality and resource allocation, forcing design teams to innovate with cost-effective yet reliable solutions that stay within financial constraints.

At the same time, we are seeing a trend toward much larger data center campus developments that integrate sustainability from the outset. Leading examples include projects like YTL’s Green Data Centre in Malaysia, which combines significant renewable energy investments with scalable capacity to deliver eco-friendly infrastructure. Similarly, Bridge Data Center has pioneered recycled water treatment systems as part of its sustainable water management approach in their Johor data centers.

These new large-scale campuses reflect the emerging market demand for facilities that not only meet fast-growing digital infrastructure needs but also achieve aggressive environmental and efficiency goals. Southeast Asian markets face the dual challenge of accommodating rapid capacity growth while integrating green technologies—requiring higher upfront investment and complex budget planning to balance operational savings with capital expenditures.

The challenge remains to plan for sufficient contingency and maintain cost-efficiency amid fluctuating market conditions, geopolitical uncertainties, and evolving sustainability expectations.

3. Infrastructure Stack: A Layered Model from My Viewpoint

To fully appreciate data center operations, I find it helpful to conceptualize an infrastructure stack layered by dependencies:

from Chapter 2 of Data Center Primer.

In my experience, Layers 2 and 4, the client IT/network hardware and the telecom/carrier networks, are most critical because disruptions here directly translate into degraded service availability and performance for customer applications (Layer 1). 

Ensuring redundancy, robust design, and proactive service management at these layers is fundamental to meeting uptime SLAs and operational excellence. Our future newsletters and articles will leverage this layered Infrastructure Stack to view either top-to-bottom or from bottom-up when reviewing the impact of an issue.

4. Data Center Ecosystem Stakeholders

From my work and reading materials, I find that Data Center stakeholders are diverse and interconnected. The proper identification of the stakeholders and their role and responsibilities will impact project success, operational performance, and overall ecosystem health:

• Data Center Operators & Owners: Including colocation providers like Equinix, hyperscale cloud operators such as AWS and Google, and enterprise owners who build and run facilities.

• Tenants & Users: Encompassing cloud platforms, enterprises, content distributors, telecom operators, financial institutions, and emerging AI/edge workloads driving demand.

• Equipment & Technology Vendors: Supplying critical infrastructure—UPS systems, generators, cooling units, racks, cabling, security hardware, and management software.

• Construction & Engineering Contractors: Responsible for design, construction, and commissioning through architectural, engineering, and specialized contractor services.

• Internal or Outsource IT service teams: Delivering remote hands, IT management, monitoring, disaster recovery, network services, and security solutions.

• Regulatory Agencies & Standards Bodies: Local and international authorities enforcing mandates, certifications, safety codes, and environmental compliance.

• Investors & Financial Partners: Including private equity, REITs, infrastructure funds, and sovereign wealth funds shaping capital allocation.

A well-functioning ecosystem depends on clear role understanding and collaboration among these stakeholders. Aligning most, if not all, of the stakeholders can make or break a data center development project.

5. Clear Requirement Specification and Site Readiness

In the March 2017 article, experience from projects like our Beijing industrial park build shows how critical clear, upfront infrastructure requirements are to avoid costly delays and compromises. Last-mile power supply challenges, unexpected third-party vendor impositions, and retrospective regulatory mandates, such as fire safety water provisions, can stall projects for years. In recent site review that I had done, early site inspections are essential to uncover issues like irregular land plot which is difficult to design for data center campus, or previous flood history uncovered to require costly mitigation measures. Failure to clarify these requirements risks escalating costs, construction delays, and operational challenges. Effective alignment among stakeholders on these specifications is key to success.

6. Energy and Water Resource Availability

Energy and water provision form the backbone of data center operation but often present unseen complexities. Securing stable last-mile electricity supply requires navigating regulatory, utility, and contractor relationships. Innovative water management—employing solutions like recycled water treatment pioneered by Southeast Asian data centers—reduces environmental impact while complying with evolving fire safety and sustainability regulations. Large-scale sustainable campuses such as YTL Green Data Centre exemplify integrating renewable energy and advanced water systems from design through operation. Planning for these resources early ensures resilience and supports long-term sustainability goals critical to market acceptance.

7. Renewable Energy and Sustainability Initiatives

Singapore’s Green Data Centre Roadmap sets a framework to expand capacity by at least 300 MW, with 200 MW reserved for green energy-integrated operators. It emphasizes achieving PUE of 1.3 or lower and Platinum Green Mark certification, alongside infrastructure upgrades supporting climate goals and energy innovation. Thailand is embracing renewable sources, with companies like True IDC targeting over 30% renewable consumption by 2030. Pilot programs support direct renewable procurement via Power Purchase Agreements (PPAs), complemented by advanced cooling and circular economy efforts. This shift reflects Asia’s growing commitment to align infrastructure growth with sustainability objectives.

8. Human Resource Challenges Amid Rapid Growth

The accelerated pace of data center development in Southeast Asia has triggered serious workforce shortages in engineering, operations, and management roles. AI has potential to replace many jobs but data center jobs are in shortage mode in part triggered by the need for AI data centers. Industry and government collaborations focus on expanding skills pipelines through retraining, mid-career transitions, and cross-sector recruitment, while competitive compensation and career path development remain priorities to ensure talent retention. There are wider effort by individual industry players, but governmental support, neutral platform like a data center industry association, coupled with education institutions, study-internship programmes hopefully have positive inertia to bridge the human resource gap.

9. Conclusion and What’s Next

Asia’s data center sector continues rapid growth amid operational, regulatory, and workforce complexities, with sustainability increasingly central. Insider experience and ecosystem collaboration are key to navigating these challenges successfully. Throughout this newsletter, you have seen how the infrastructure stack underpins the technical foundation of data center operations and design—understanding it is essential to grasping the ecosystem’s complexity.