World Bank Group’s Eric Crabtree Talks Indonesian Data Center Arena: Chinese and Americans Will Vie For Influence in Hyperscale Activity

NEW YORK CITY, NY — If Europe is the next frontier for North American data center providers, then GDPR will make sure that it’s not quite the Wild, Wild West. But even if GDPR rolls out smoothly, Brexit may keep the industry on its toes for awhile. Despite this uncertainty, the number of firms looking to Europe for new opportunities proves that the struggle must be worth it.

So, At CapRE’s New York City Data Center Summit last month, we convened a panel of leading regional insiders to talk about the burgeoning European data center. The Impact of Europe: Data Center Demand-Supply and Forecasting the Factors at Play Across the Pond, Including: Brexit and GDPR featured half a dozen panelists who discussed the latest trends in European demand, as well as what to expect as GDPR becomes part of our daily business. Below we cover part of that discussion, honing in on major international players such as Alibaba.

“On AliBaba, if you look at a market, I was in Indonesia last week, and that’s a market that hasn’t gone very quickly, but it does have 260 million people. It’s enormous,” began Eric Crabtree, Chief Investment Officer, International Finance Corporation at World Bank Group. “A lot of it has been served by Singapore capacity, but those days are going to be past, to some extent. Because there’s so much demand and I’m sure that the government is going to get busy on regulation as well. but one of the catalytic events is that AliBaba’s coming to take in 800 racks. And so there has to be a response by the other competitors.”

data center summitCrabtree then shared that Indonesia is one of the markets where I think that the Chinese and the Americans will vie for influence in the hyperscale capacity. “And I think that the Chinese are very well-positioned,” he stressed. “But there is going to be a lot of capacity added in a market like that, and you can appreciate it because if you look at how much capacity is yet to be added to the US, you’re starting from a much lower base, obviously, in a market like Indonesia. And to your point they are skipping, certain things.”

“For example, they never got into brick and mortar retail. What’s happened is that in many areas of the country, it’s just e-commerce. And that’s exactly the player that’s taking up space in halls, and needs it locally,” he concluded.

Next, a woman from the question rose her hand to ask a question. “I have two questions. One is that the GDPR was expected. Do you think all of the capacity in the market has adjusted for that already?” She asked. “And then I have a question for Eric, there is a lot of Asian data center capacity coming out of Singapore and HK. As these countries in Asia have data sovereignty laws similar to GDPR, will that shoot capacity out of those large markets and shift them in-country, to create demand for hyperscale?”

“GDPR doesn’t change the amount of data,” replied Garry Connolly, Chairman at GconnTec & President Host in Ireland. “That’s the first thing. It just changes the governance around the data. So in terms of whether data is sitting in one data center or another, it just moves. Privacy by design and security by design are just the fundamentals of GDPR. Now how hard can that sound? It can, but it just goes to the fundamental route of when you’re developing processes and procedures in software.”

Eric Crabtree, Chief Investment Officer- International Finance Corporation, World Bank Group

For more on the European data center arena, check out previous CapRE Insider Reports covering previous remarks from this panel: