Alibaba Cloud announces new data centres in Malaysia, the Philippines
Technology
The expansion ensures that Alibaba Cloud can meet the rising global demand for secure cloud services
BEIJING (Reuters) - Alibaba Cloud, the cloud computing arm of Chinese tech giant Alibaba Group, announced the opening of its third data center in Malaysia on Tuesday and disclosed plans to launch a second data center in the Philippines in October, according to a statement released on Wednesday.
The expansion ensures that Alibaba Cloud can meet the rising global demand for secure, resilient and scalable cloud services, the company said.
The operators of energy-hungry data centres in Malaysia are scrambling to reassess costs after steeper-than-expected power tariffs kicked in on Tuesday, industry players said, clouding prospects for the Southeast Asian hub of digital investments.
Competitive rates for electricity, which forms the bulk of operating costs, make Malaysia a magnet for data centres compared to land-scarce neighbour Singapore, luring billions of dollars in investment from companies like Microsoft and Google.
The tariff hike unveiled in December, with details fleshed out last month, could boost electricity costs by 10% to 14% before surcharges for major consumers such as data centres, an industry official and a government official said.
A key element of the uncertainty stems from the bands used to calculate power bills in the tiered pricing system, with industry players saying most major centres are expected to fall in the ultra-high voltage category with the highest tariffs.
With many in the industry unprepared for the scale of increases, some investors may now adopt a wait-and-watch approach, said Gary Goh, founder and director of data centre advisory firm Sprint DC Consulting.
"For a 100-megawatt (MW) facility, this could translate to an additional $15 million to $20 million per year without considering fuel surcharge," he added.
The government plans to announce a fuel surcharge every month that reflects changes in fuel prices and foreign exchange. This month the surcharge stands at zero, state grid operator Tenaga Nasional Berhad (TNB) said on its website on Tuesday.
Malaysia is set for the region's fastest surge in data centre power demand, tripling to 21% by 2027 from 7% in 2022, a joint report in May by consultancy Bain & Co and firms such as Google and Singapore's state-owned Temasek showed.
The new tariff structure means operators of big data centre operators will now account for a higher share of grid management costs than smaller peers, said Cheam Tat Inn, managing director of the Malaysian arm of U.S. operator Equinix.
