Japan and Southeast Asia Data Centre Market Research Report Information by Offerings (Hardware (Networking, Servers, Storage, HVAC, Electrical & Power, Others), Software (Asset Management, Capacity Planning, Power Monitoring, BI & Analytics, Others), Services (Installation & Consultation, Support & Maintenance, Security Services, Others), by Data Center Type (Enterprise Data Center , Colocation Data Center, Cloud Data Center, Edge & Micro Data Center ), by Tier Type (Tier 1, Tier 2, Tier 3, Tier 4), by Vertical (BFSI, IT & Telecom, Retail

Japan and Southeast Asia Data Centre Market Overview

The Japan and Southeast Asia Data Centre Market was valued at USD 32.04 Billion in 2024. The Data Centre Market industry is projected to grow from USD 33.77 Billion in 2025 to USD 50.62 Billion by 2035, exhibiting a compound annual growth rate (CAGR) of 4.8% during the forecast period (2025-2035)

The increased cloud adoption, demand for data storage and management, growth of IOT and connected devices and surge in digital transformation and big data analytics are driving the growth of the Data Centre market.

As per the Analyst at MRFR, the Japan & Southeast Asia Data Centre Market is witnessing dynamic growth, propelled by the increased cloud adoption, demand for data storage and management, and growth of IOT and connected devices. Nevertheless, regulatory challenges affecting data center operations, staffing shortage in the data center industry, and environmental constraint and sustainability challenges are seen as some of the obstacles that would impede its progress. With these, the growing markets, expansion of edge computing infrastructure, investment in hybrid cloud solutions, there is potential. These are just some of the dynamics that mold the market.

FIGURE 1: JAPAN AND SOUTHEAST ASIA DATA CENTRE MARKET VALUE (2019-2035) USD BILLION

 Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review

Japan and Southeast Asia Data Centre Market Opportunity

Expansion of edge computing infrastructure

The rapid growth of edge computing presents a significant opportunity for the data center market, driven by the increasing adoption of AI, machine learning (ML), IoT, and real-time data processing applications. As computing capacity and connectivity demands continue to surge, organizations are relying on data centers to efficiently process and store vast amounts of data while maintaining high performance. Edge computing infrastructure enables real-time data processing closer to the source, reducing latency, enhancing speed, and optimizing network efficiency. 

This distributed IT architecture is essential for powering advanced AI algorithms, generative AI, large language models (LLMs), and low-latency applications, all of which require immediate processing capabilities. With the edge computing market projected to grow from approximately $34 billion in 2024 to over $700 billion by 2033, data centers must evolve to accommodate this shift. The rise of edge data centers—smaller, decentralized facilities located closer to end-users—creates new investment opportunities for operators looking to expand their infrastructure. By integrating edge computing with existing cloud and hyperscale data centers, businesses can enhance real-time analytics, improve performance, and reduce network congestion.  

Japan and Southeast Asia Data Centre Market Segment Insights

Data Centre by Type Insights

Based on Type, the Japan & Southeast Asia data center market is segmented into hardware, software and services. The hardware is further segmented into Networking, Servers, Storage, HVAC, Electrical Power, and Others. The software segment includes Asset Management, Capacity Planning, Power Monitoring, BI Analytics, and Others. Whereas the Services is classified into Installation Consultation, Support Maintenance, Security Services, and Others. The Hardware segment dominated the Japan and Southeast Asia market in 2024, while the Software segment is projected to be the fastest–growing segment during the forecast period. Hardware segment of data center market encompasses servers storage systems networking equipment power distribution units cooling systems racks. 

These elements essentially form physical foundation of data centers enabling efficient data processing and incredibly fast storage. Rise of hyperscale data centers fuels high demand for specialized hardware due to increasingly complex AI-driven workloads and rapid 5G expansion. Innovations in energy-efficient processors liquid cooling technologies and modular infrastructure further shape market growth rapidly. Global semiconductor shortage severely impacts supply chains forcing data center operators to secure alternative sources via complex logistics network. Edge computing gains traction rapidly with the need for compact high-density hardware solutions rising swiftly fueling heavy investment.

Data Centre by Data Center Type Insights

Based on data center type the Japan & Southeast Asia data center market is segmented into enterprise data center, colocation data center, cloud data center, and edge data center. The Colocation Data Center segment dominated the Japan and Southeast Asia market in 2024, while the Cloud Data Center segment is projected to be the fastest–growing segment during the forecast period. Multiple organizations rent space power cooling and network connectivity in a colocation data center with shared infrastructure. 

This model significantly curtails upfront costs thereby offering superb reliability and robust security overall security features. Major players like Equinix Digital Realty and NTT Communications expanded globally rapidly due to rising demand for multi-tenant data centers. Hybrid cloud adoption and low-latency application demands fuel colocation expansion rapidly because businesses prefer outsourcing infrastructure management, so they focus on core operations. Green data centers are prompting colocation providers to invest heavily in renewable energy sources via advanced cooling solutions on site.

Data Centre by Tire Type Insights

Based on tire type, the Japan & Southeast Asia data center market has been segmented into Tire 1, Tire 2, Tire 3, and Tire 4. The Tier 3 segment dominated the Japan and Southeast Asia market in 2024, while the Tier 3 segment is projected to be the fastest–growing segment during the forecast period. A Tier 3 data center supports heavy-duty enterprise workloads with numerous redundant power and cooling paths enabling maintenance during ongoing activity. Facilities like these get utilized extensively by various healthcare providers under highly secure circumstances for maximum reliability and performance. Tier 3 servers are versatile with their capability of undergoing repairs without requiring downtime thereby making them popular amongst organizations due to reliability. 

These data centers support 24/7 operations and are built with robust infrastructure that withstands power failures, hardware malfunctions and environmental risks daily. Rapidly escalating demand for AI and IoT applications drives businesses upward towards Tier 3 infrastructure standards for high performance. Tier 3 facilities incorporate advanced cybersecurity measures and energy-efficient designs amidst rapidly evolving enterprise needs and strict regulatory requirements daily. Tier 3 seemingly emerges as standard practice among numerous organizations rapidly abandoning lower-tier facilities for utterly seamless business continuity purposes.

FIGURE 2: JAPAN AND SOUTHEAST ASIA DATA CENTRE MARKET SHARE BY TIRE TYPE 2024 AND 2035 (USD BILLION)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Data Centre by Vertical Insights

Based on vertical, the Japan & Southeast Asia data center market has been segmented into BFSI, IT telecom, retail e-commerce, healthcare, energy power, government, manufacturing, and others. The IT & Telecom segment dominated the Japan and Southeast Asia market in 2024, while the IT & Telecom segment is projected to be the fastest–growing segment during the forecast period. Digital economy heavily relies on IT and telecom sector as its backbone with data centers playing crucially in cloud computing network operations. Telecom providers rely heavily on data centers supporting mobile networks fiber-optic infrastructure and content delivery networks enabling seamless internet video streaming services. Telecom companies expand edge computing rapidly nationwide beneath burgeoning demands from 5G and IoT applications, reducing latency significantly. 

Cloud service providers like AWS Microsoft Azure Google Cloud rapidly expand hyperscale data centers in response growing demand for enterprise cloud adoption SaaS applications AI workloads. Shifts toward hybrid multi-cloud strategies drive need for software-defined networking and network function virtualization with AI-driven automation optimizing traffic. Telecom operators shifting towards cloud-native architectures need low-latency data centers with high-bandwidth capability for real-time AI apps and VR experiences. The IT sector sees increased demand for cybersecurity solutions with data center providers implementing zero-trust architectures alongside DDoS mitigation and AI-based threat detection.

Data Centre by Region Insights

Based on region, the Japan and Southeast Asia Data Centre Market is Segmented Indonesia, Philippines, Vietnam, Thailand, Malaysia, Singapore, Cambodia, Laos, Rest of Southeast Asia. The Japan dominated the North America market in 2024, while the Southeast Asia is projected to be the fastest–growing segment during the forecast period. Japan's data center market undergoes rapid expansion fueled by increasing adoption of cloud computing and digital transformation across many sectors rapidly. Country rapidly becomes major tech hub with global cloud giants like AWS Microsoft Azure Google Cloud heavily investing in infrastructure. Domestic enterprises and these providers fuel need high-performance data center solutions that are super secure and wildly scalable. Tokyo boasts robust digital infrastructure and strong connectivity, making it a primary hub for data center operations historically. 

Regional expansion into cities like Osaka or Tatebayashi becomes increasingly prominent as businesses seek disaster resilience and lower operational costs underground. Japanese authorities vigorously back dispersal of data centers in rural areas facilitating investments in local facilities reducing congestion. Japan's initiative falls in line with a broader vision of boosting its digital economy by distributing data processing capabilities more evenly nationwide. Adoption of IoT and big data analytics accelerates rapidly nowadays due to AI-driven applications handling massive workloads with minimal latency. Businesses in various sectors like finance healthcare manufacturing rely heavily on hybrid cloud solutions for enhanced data security and better regulatory compliance.

FIGURE 2: JAPAN AND SOUTHEAST ASIA DATA CENTRE MARKET SHARE BY REGION 2024 AND 2035 (USD BILLION)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Japan and Southeast Asia Data Centre Key Market Players & Competitive Insights

Many Japan and Southeast Asia, regional, and local vendors characterize the Data Centre Market. The market is highly competitive, with all the players competing to gain market share. Intense competition, rapid advances in technology, frequent changes in government policies, and environmental regulations are key factors that confront market growth. The vendors compete based on cost, product quality, reliability, and government regulations. Vendors must provide cost-efficient, high-quality products to survive and succeed in an intensely competitive market.

The major competitors in the market are NTT Data Group, Equinix Inc, Cisco Systems, Microsoft Corporation, IBM, Huawei Technologies, HPE, Dell, Aws, Digital Realty Trust Inc among others. The Japan and Southeast Asia Data Centre Market is a consolidated market due to increasing competition, acquisitions, mergers and other strategic market developments and decisions to improve operational effectiveness.

Key Companies in the Japan and Southeast Asia Data Centre Market include

• NTT Data Group
• Equinix Inc
• Cisco Systems
• Microsoft Corporation
• IBM
• Huawei Technologies
• HPE
• Dell
• Aws
• Digital Realty Trust Inc

Japan and Southeast Asia Data Centre Market Industry Developments

February 2025: Cisco announces the Cisco N9300 Series Smart Switches with a new class of intelligent networking silicon alongside embedded DPUs, reimagining AI data center designs.

October 2024: Dell Technologies boosted AI for enterprises with Dell AI factory advancements. Dell has expanded the program to include the Dell PowerEdge XE9685L and Dell PowerEdge XE7740 servers in the standard 19-inch Dell Integrated Rack 5000 (IR5000). The Dell IR5000 is designed for high-density applications in a space-efficient form factor and delivers high performance without compromising on energy efficiency.

December 2024: AWS announced new data center components designed to support the next generation of artificial intelligence (AI) innovation and customers’ evolving needs. These capabilities combine innovations in power, cooling, and hardware design to create a more energy efficient data center that will underpin further customer innovation. These new capabilities will be implemented globally in AWS’s new data centers, and many components are already deployed in its existing data centers.

May 2024: Huawei launched flagship data center service centers. This move is part of Huawei's efforts to ensure the stable running of data centers with excellent services, while at the same time moving the industry towards an era of intelligent computing.

Japan and Southeast Asia Data Centre Market Segmentation

Data Centre by Offerings Outlook

• Hardware
  • Networking
  • Servers
  • Storage
  • HVAC
  • Electrical & Power
  • Others 
• Software 
  • Asset Management
  • Capacity Planning
  • Power Monitoring
  • BI & Analytics
  • Others
• Services 
  • Installation & Consultation
  • Support & Maintenance
  • Security Services
  • Others

Data Centre by Data Center Type Outlook

• Enterprise Data Center 
• Colocation Data Center 
• Cloud Data Center 
• Edge & Micro Data Center 

Data Centre by Tier Type Outlook

• Tier 1
• Tier 2
• Tier 3
• Tier 4

Data Centre by Vertical Outlook

• BFSI 
• IT & Telecom 
• Retail & E-Commerce 
• Healthcare 
• Energy & Power 
• Government 
• Manufacturing 
• Others

Data Centre by Region Outlook

• Japan
• Southeast Asia
  • Indonesia
  • Philippines
  • Vietnam
  • Thailand
  • Malaysia
  • Singapore
  • Cambodia
  • Laos
  • Rest of Southeast Asia

Report Attribute/Metric	Details
Market Size 2024	USD 32.040 Billion
Market Size 2025	USD 33.77 Billion
Market Size 2035	USD 50.62 Billion
Compound Annual Growth Rate (CAGR)	4.8% (2025-2035)
Base Year	2024
Forecast Period	2025-2035
Historical Data	2019-2023
Forecast Units	Value (USD Billion)
Report Coverage	Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
Segments Covered	By Offerings, Data Center Type, Tier Type, Vertical
Geographies Covered	Japan and Southeast Asia
Countries Covered	Indonesia, Philippines, Vietnam, Thailand, Malaysia, Singapore, Cambodia, Laos, Rest of Southeast Asia
Key Companies Profiled	NTT Data Group, Equinix Inc, Cisco Systems, Microsoft Corporation, IBM, Huawei Technologies, HPE, Dell, Aws, Digital Realty Trust Inc
Key Market Opportunities	·         Expansion of edge computing infrastructure ·         Investment in hybrid cloud solutions
Key Market Dynamics	·         Increased Cloud Adoption ·         Demand for data storage and management