Singapore: Data Centres in 2021

Across the globe data centre plans and trends were thrown into disarray in 2020 by COVID-19 restrictions. Physical construction and renovation plateaued in many areas, and staffing and talent shortages were acutely felt. At the same time, there was significant investment, uptake and innovation as remote-working increased demand with customers and operators alike working to expand capacity, extend lifecycles and improve efficiency under the constraints of COVID-19.

With recovery on the horizon, many of these challenges and trends will carry over in 2021 which will bring along its own set of challenges and opportunities.

Driving Innovation

The spike in usage and demand because of remote-working and the challenges of physical distancing and movement restrictions has catalyzed innovation on the part of customers and operators to keep up with service level obligations as well as physical deployments and monitoring. Continued innovation in this area has increased reliability and extended the useful life of existing assets. There is also increased interest and development in proprietary ARM-based hardware and virtualization of more areas of data centre infrastructure and operations. These innovations need to be carefully assessed before deployment and commercial contracts clearly setting out parties’ obligations and liabilities must be put in place to address any potential impact on existing service level and security obligations.

The rollout of 5G and the proliferation of IOT devices and content such as smart sensor data and AR/VR applications is driving demand for low cost and low latency access to storage and processing. Networks of edge data centres and along with DCIs and other high-bandwidth low-latency interconnects promise to complement traditional data centres. Operating with a mix of data centre types with various interconnects and power demands requires careful supervision and monitoring to ensure security, availability and sustainability. In particular, customers and operators need to be familiar with the characteristics and risks at each level in order to ensure the necessary expertise and protections are in place. 

Cyber Security Threats

Remote-working and the disruption and confusion wrought by COVID-19 provided ideal conditions for both targeted and opportunistic attacks. As facilities that rely on connectivity to function, it is imperative that a highly integrated and proactive approach is taken to monitor and secure connections at the edge and within the data centre, particularly where the latest technologies and connected systems are being adopted. Going forward it may be just as if not more important that outgoing traffic and traffic within the data centre is carefully monitored for any threat or exfiltration from any attack that may have been missed during the disruption.  


It is estimated that some 50 zettabytes of data were generated in 2020 with that number projected to more than triple by 2025 and data centre capacity growing at a similar rate to more than 1,200MW by 2025. This massive scale up places data centres in an ideal position to lead the way in energy efficiency and pushing for sustainable energy generation. The global push for sustainability and clear integration of sustainable development goals in the European Commission’s policies and initiatives adds even more pressure to on customers and operators to better manage their energy consumption. Closer to home, Singapore Standard SS 564 (Sustainable data centre) was issued on 20 February 2020, providing a timely model for establishing, implementing, monitoring, maintaining and improving an energy and environmental management system for data centres. The standards help data centres improve their sustainability, thereby enhancing their competitiveness through specific requirements for energy and water consumption and efficiency, and mitigation of significant environment impacts.

Many of the more innovative solutions in the areas of building performance and energy efficiency may require rethinking in terms of capital investment and payment structures but early results are encouraging. Retrofits and upgrades should be factored in the early design phases to protect the initial investment and to keep up with the rapid rate of technological advances in this area including the replacement of underperforming solutions.

This article is produced by our Singapore office, Bird & Bird ATMD LLP, and does not constitute legal advice. It is intended to provide general information only. 

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