Vietnam’s data center sector is booming at an unexpected pace, with both domestic and global players willing to establish more data centers as demand for data storage continues thriving. The implementation of the new law on data localization since 2022 has been pointed out as the main contributing factor.
Specifically, the new Decree, which provides guidelines for implementing the Law on Cybersecurity 2018, requires all domestic firms and some foreign companies to store particular types of data within Vietnam’s territory for at least 24 months. The law applies to those offering services in several industries, including telecommunications, e-commerce, and online payments.
Currently, foreign players control over 80% of the country’s cloud computing sector, led by Amazon Web Services with 33%, followed by Google and Microsoft holding 21% each. Six of the seven most popular social apps in Vietnam also belong to foreign tech giants, such as Meta and ByteDance. This indicates that most locally-generated data is stored, transferred, and processed mainly through oversea data centers, while an electric copy of data is still required at local infrastructures.
In the report released by Google, Temasek and Bain & Company, Vietnam will become the fastest-growing digital economy in South East Asia with an annual growth rate of 31% between 2022 and 2025. In 2022, Vietnam’s digital economy was valued at USD 23 billion, representing a year-on-year increase of 28%.
(Source: Business Times)