STT tears ahead with data centre growth

STT Global Data Centres has carved out a niche by running data centres as a service provider and STT Defu, which opened just last year, is almost full, with a second centre on its campus due by the end of next year. Chief executive Bruno Lopez says t
STT Global Data Centres has carved out a niche by running data centres as a service provider and STT Defu, which opened just last year, is almost full, with a second centre on its campus due by the end of next year. Chief executive Bruno Lopez says the firm is looking to expand into South-east Asia, and eyeing Australia and New Zealand.ST PHOTO: DESMOND WEE

Its unit has 50 facilities in many markets and is ramping up expansion in S'pore and beyond

It began from a standing start just three years ago but the data centres unit of ST Telemedia (STT) has already built an impressive portfolio.

STT Global Data Centres has 50 facilities across numerous countries, including in Singapore where it is ramping up expansion.

STT Defu, which opened in the industrial estate near Hougang just last year, is almost full, with a second centre on its campus due by the end of next year.

Chief executive Bruno Lopez notes that the unit's relatively late arrival to the fast-growing sector may not have been that much of a handicap in the end: "What was, strictly speaking, potentially late is not really late if you see where we are today in terms of positioning."

The company, which is in the Temasek Holdings stable, believes it has carved out a niche by running data centres as a service provider instead of owning them as a real estate investment trust.

Mr Lopez says: "Why are we filling it up in less than one year, and others are not able to fill it up? That's the key question. It has to be about the service."

Chief operating officer Jonathan King adds that the launch last year of the STT Connect unit, a cloud service solutions provider, does not mean that the firm is going to "morph into any form of a cloud provider per se".

He says: "STT Connect we see as an enabler that helps some of our smaller and medium-sized customers venture into the cloud and execute their cloud strategy. It's not a business that is in competition with... Microsoft, Amazon, Google."

Mr Lopez tells The Straits Times that STT Global Data Centres is not looking to build up assets for the sake of flipping them, either. "I think we're very focused in our offering. I think that helps our customers as well, because we're not trying to be a real estate investor... We operate it as an operating company."

The same thinking has guided the data centres unit's expansion, which involved acquiring stakes in country-specific partners such as GDS Services in China and Virtus Data Centres in Britain, as well as forming joint ventures with telecommunications companies like StarHub here and India's Tata Communications.

"We feel South-east Asia is a very underserved market today, so we are actively looking to expand into some South-east Asian countries," says Mr Lopez.

Australia and New Zealand are also in his sights. "Then you've got Europe itself, Paris, Frankfurt, Madrid and Dublin, which are attractive hubs themselves."

Mr King says a key challenge is the breakneck pace of change and the unpredictability of the data sector. "If you roll back the clock five years... operators would wait for a pre-commitment, like you do in a residential development or a retail development."

But now, the evolution of the cloud has made it difficult for large customers to predict "what cities they need to be in (and) in what quantums".

But the future is bright, with Mr King predicting "the need for data centres, the growth drivers for data centres remain very strong" - whether bottom-up, from the technical demands of media consumption, or top-down, in how governments regulate secure, long-term information storage.

A version of this article appeared in the print edition of The Straits Times on July 22, 2017, with the headline 'STT tears ahead with data centre growth'. Print Edition | Subscribe