MACTAN, Cebu — A major player in the industry of information technology foresees data centers will boom and sprout like mushrooms in 2024, as the country is now digitally equipped and can battle head-to-head with counterparts in the ASEAN region.
During the kick-off of the three-day VST ECS CXO Tech Summit at the Dusit Thani here, Jimmy Go, president and CEO of VST ECS stressed that IT spending will remain strong up to the end of this year and in 2024.
“The data center system market runs number five on the list of IT spending markets, expected to grow by 3.7 percent in 2023. Data center sales this year will reach $224 billion and are expected to grow by 6.1 percent by 2024. In the Philippines, we see a surge of data centers that build investments, done by Filipino companies, while some are foreign investments, particularly in Metro Manila, Mandaue and Cainta, among others,” Go said.
Based on the study “The Rise of Data Centers: Opportunities for 2023,” commissioned by the European Chamber of Commerce of the Philippines in partnership with Santos Knight Frank and Quisumbing Torres Law Firm, the Philippines was seen as having the biggest opportunity amid the data center boom.
As the Philippines continues to embrace digital transformation, as shown by its high data consumption, the growing popularity of e-commerce, and greater demand for internet bandwidth, telco players, real estate developers, and global cloud service providers are keen to further boost the country’s Internet technology by developing the region as the next data center hotspot, according to the study.
A data center is a physical facility that organizations use to house their critical applications and data. Its design is based on a network of computing and storage resources that enable the delivery of shared applications and data.
Key components of a data center design include routers, switches, firewalls, storage systems, servers and application-delivery controllers.
Device industry’s growth positive
Meanwhile, Go said the device industry will return to growth in 2024, nearly four years after the slump as spending was tamed due to the wrath of the Covid-19 pandemic.
“Expect that device spending will increase by 11 percent next year to $759 billion and a new generative AI software might require faster devices,” he said, quoting a report of Gartner, an IT research firm that operates in nearly 90 countries.
Further, Go said business spending on software will not slow down in 2024, “as Gartner predicts that the software industry will grow at a faster rate than any other IT segment,” adding that spending in software is seen to accelerate over 13 percent year-on-year in 2024, surpassing the $1 trillion spending in 2023.
On the other hand, spending on IT services is also expected to increase to over $1.5 trillion dollars in 2024.