Data Centre

‘Bangladesh's data center boom is taking off, fueled by rising demand and strategic location. The Data Centre is now a part of the digital gold rush!’

Bangladesh's data center industry, once a glimmer on the horizon, is now ablaze with potential. Valued at about Tk 2000 Cr in 2023, it boasts a growth rate of 30% projected by 2026, outpacing regional giants like India and Vietnam. This dynamic ascent begs the question: Is Bangladesh the next data center hub of Asia? 

Major Investors

1. Public Sector: 

National Data Centre (Tier-IV) Invested: Tk 1500cr.

BCC Data Centre (Tier-IV) Invested: Tk 250cr.

2. Private Sector:

Felicity IDC Limited (Tier-III) Invested: Tk 250cr.

RedDot Digital Limited (Tier-III) Invested: Tk 150cr.

Dhaka Colo Limited (5 centers) Invested: Tk100cr.

DataHub Asia Invested: Tk 50cr.

CoLoCity, NRB Telecom and other players Invested: Tk 100cr.

3. Foreign Investment:

Jatra International Invested: Tk 800cr.

DCC Data Park (Yotta) Invested: Th 2000cr.

Saudi Company DataVolt Invested: Th 1000cr.

Competitive Landscape

Growth of Data Centres in Asia and Bangladesh

South Asia:

The data center market in India, valued at approximately USD 5.90 billion in 2023, is projected to grow at a CAGR of 11.1%, reaching nearly USD 15.07 billion by 2032 published in Statista, driven by digital transformation across industries, increased adoption of cloud infrastructure, affordable internet services, deployment of digital tools, and the advent of 5G. In contrast, Singapore's data center market, a key hub in the APAC region, has recovered from a 2019 moratorium according to IMDA, with 80 MW capacity recently awarded to four entities and is expected to surpass 1GW in 2024. Meanwhile, Mordor Intelligence informed that Malaysian data center market, valued at USD 1.5 billion in 2022, is forecasted to grow at a 9.40% CAGR, reaching USD 2.8 billion by 2030, indicating steady regional growth in data center markets.

Bangladesh:

The growth is driven by Bangladesh’s increasing emphasis on digital technology, Bangladesh: cybersecurity, artificial intelligence, robotics, healthcare, and IT. The increasing demand for digitalization and scalable IT infrastructure, the wide adoption of the 4G and 5G networks, and the rising penetration of technology giants are also boosting the growth of the ICT market. The domestic market size of the data centre industry in Bangladesh is expected to grow from $6.12 billion in 2023 to $10.89 billion by 2028, at a CAGR of 12.22% reported by Mordor Intelligence. This growth is supported by increasing IT investments and the government’s initiatives to deploy 5G services in Bangladesh. 

SEA-ME-WE 6: A Game Changer

Boosting Connectivity:

The SEA-ME-WE 6 submarine cable system, set to be operational by 2025, is expected to significantly transform Bangladesh's data landscape. This development will bring a substantial increase in bandwidth, boosting capacity from 6600 Gbps to 13200 Gbps, far surpassing current levels reported by BSCCL. With multiple cable routes to ensure continuous connectivity, even with single-end feed power in case of far-end faults, ensuring better uptime and resilience against potential disruptions.

Economic Expansion

The SEA-ME-WE 6 is not just about improved internet services, it’s also about financial growth. The Bangladesh Submarine Cable Company Limited (BSCCL) anticipates a boost in revenue as the country moves towards digitalization. Furthermore, with the surplus bandwidth, Bangladesh could potentially become an exporter of internet bandwidth, creating a new revenue stream for the country.

The data center boom, fueled by improved connectivity, is poised to draw significant domestic and international investments in data centers, leading to the creation of new jobs in construction, operation, and maintenance. The Daily Star wrote in one article that  growth was not limited to physical infrastructure; it would catalyze expansion in data-driven industries such as e-commerce, cloud computing, online services, and digital media. Moreover, improved access to global markets will become a tangible benefit for businesses. 

Digital Transformation

The acceleration of cloud adoption, facilitated by faster and cheaper internet, will empower businesses with scalable and cost-effective computing resources. This enhanced connectivity will also bolster emerging technologies such as AI, IoT, and VR, fostering innovation and technological advancements. Furthermore, Oracle said that the sectors like education and healthcare will significantly benefit, with telemedicine, online education, and remote learning becoming more accessible and effective due to improved internet infrastructure.

This opens doors for:

Data Storage and Processing: Businesses can leverage Bangladesh's location and connectivity for regional and global data needs.

Competition with Established Hubs: Bangladesh has made significant strides in developing hi-tech parks to foster innovation and entrepreneurship in the country. Also, the startup scene in Bangladesh is flourishing with companies like Foodpanda and Pathao revolutionizing dining experiences and transportation respectively (Bangladesh Hi-Tech Park). 

Security and Regulatory Issues: Government replaced the Digital Security Act 2018 (DSA) with the Cybersecurity Act 2023 (CSA) after facing criticism for the use of the DSA to stifle freedom of expression and suppress dissent. 

Types of Data Centre

1. Enterprise Data Centers: Owned and operated by companies, these data centers are on corporate campuses and tailored for end-user optimization. Large organizations often opt for these expensive, highly customized on-premises or cloud data centers.

          

2. Managed Services Data Centers: Operated by a third party, these data centers involve companies leasing equipment and infrastructure. The third party manages network architecture and administration, offering dedicated servers and handling their maintenance.

3. Colocation Data Centers: Companies rent space in these third party-owned centers, providing and managing their own IT components like servers and storage. The colocation provider handles building maintenance, bandwidth, and security.

4. Cloud Data Centers: Managed entirely by third-party providers, these centers host data, and applications offsite. Providers like AWS, Microsoft Azure, and IBM Cloud oversee all management aspects. They offer shared IT resources to multiple customers and maintain hyperscale and edge data centers for different needs.

Tiering the Universe (Infrastructure)

The tier classification system for data centers is a standardized methodology developed by the Uptime Institute to evaluate the reliability and performance of a data center’s infrastructure. Phoenix Nap has briefly described each tier in Bangladesh based on the classification:

Tier I: Basic facilities offering limited redundancy and availability, like the initial data centers in Bangladesh.

Tier II: More robust, featuring redundant power and cooling systems, like Robi Axiata Data Centre.

Tier III: Highly reliable, with concurrent maintainable components and 99.982% uptime, exemplified by the National Data Centre.

Tier IV: Fault-tolerant, guaranteeing continuous operation even during major disruptions, not yet present in Bangladesh.

Demystifying the Machinery:

Data centers are the powerhouses of the digital age. Their key components include:

Servers: The brains of the operation, storing and processing data.

Storage Devices: Hard drives, solid-state drives, and tape libraries for data archiving.

Network Equipment: Routers, switches, and firewalls ensure seamless data flow and security.

Power and Cooling Systems: Ensuring uninterrupted power supply and optimal temperature control for equipment.

Software: Managing servers, storage, and network operations.

These components work together to support diverse applications:

Cloud Computing: On-demand access to computing resources like virtual servers, storage, and software.

Web Hosting: Providing platforms for websites and applications to function online.

E-commerce: Supporting online shopping platforms and secure payment transactions.

Online Gaming: Delivering lag-free gaming experiences for a growing audience.

E-government: Enabling online government services and citizen engagement.

The Government of Bangladesh has also initiated 25 Hi-Tech parks and software technology parks across Bangladesh, along with increasing the power generation to 15,000 MW which is crucial to accommodate new data centers. 

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