These Four APAC Cities Will Feel Data Gravity Most

Image credit: iStockphoto/carlotoffolo

The APAC region will become an enterprise data powerhouse with the highest compounded annual growth rate (CAGR) of 153% by 2024.

The conclusion comes from new research by Digital Realty, which shows that four cities in the top six for the Data Gravity Intensity Metro forecast are from the region.

Singapore came first place with 200% CAGR through 2024, followed by Hong Kong (2nd), Sydney (4th), and Tokyo (6th). In contrast, North America and Europe, Middle East, and Africa (EMEA) are predicted to have 137% and 133% CAGR, respectively.

The research, titled "The Data Gravity Index DGx™," measured the creation, aggregation, and private exchange of enterprise data across 21 metros. It highlighted regions with robust global connectivity and an abundance of data-led industries, such as a thriving technology scene or financial services sector, creating so much enterprise data that they produce a 'Data Gravity' effect, exponentially attracting more data to the region.

"Data Gravity is the idea that data is an anchor that is often hard to move, especially as data volumes grow. If that growth happens in clouds that aren't easily accessible by the enterprise using it, its full value can't be realized, and they'll be trapped into spending exorbitant sums to free it," said Eric Hanselman, chief analyst at 451 Research.

Measured in gigabytes per second, Data Gravity Intensity is expected to grow by a CAGR of 139% globally. It comes as global enterprises increase their digital infrastructure capacity to aggregate, store, and manage most of the world's data. 

"Most enterprises and service providers are just at the beginning stages of understanding data gravity's potential impact on their innovation, customer experience, and profitability, but they need to be designing for it now. The study is designed to give CIOs, chief architects, and infrastructure leaders insight into the phenomena causing architecture constraints as well as a blueprint for addressing them," said Chris Sharp, chief technology officer at Digital Realty.

However, it's not only the abundance of enterprise data that's giving APAC cities a great advantage but the flow of that data between them. According to the Data Gravity Index DGx™, APAC is home to many of the world's most interconnected city pairings. This can be attributed to the regulatory ease of doing business and the cities' thriving financial and manufacturing centers. These include Tokyo and Hong Kong, as well as Beijing and Shanghai.

Despite the vast benefits of having a thriving data economy with robust, open data exchanges with other cities, being in a city with a strong Data Gravity effect is a mixed blessing for businesses. Many businesses are accruing increasing amounts of enterprise data to transform their businesses through digital transformation. Still, they are overwhelmed by volume, weighing down digital transformation efforts instead of enabling them.

"With the Data Gravity Index DGx™, Digital Realty has taken thousands of data points about where data is being stored and processed and boiled them down into one easy-to-understand number. The DGx makes it clearer than ever how important low latency is to emerging markets (e.g., China, India, Brazil) and will serve as an important guide to Zenlayer as we make new deployments around the world," said Joe Zhu, founder, and chief executive officer at Zenlayer.

However, the study also highlighted challenges. The unmanageable volumes of enterprise data and gravity create issues beyond the IT department.  These included:

  • Limited innovation: inability to process enterprise data effectively will hold back technological advances.
  • Poor customer and employee experiences: too much enterprise data being produced will result in ineffective management of that data, subsequently leading to negative customer experience.
  • Increased costs: more enterprise data being produced will mean more capital needs to be invested in capturing, managing, and processing it.
  • Compliance issues: an abundance of enterprise data will result in organizational challenges in dealing with regulatory and compliance-related matters.
  • Security: an abundance of data gives bad actors more vantage points.

"We've seen that Data Gravity not only attracts data but makes both data and services that rely on it exponentially more difficult to move. This gives cities with a particular weight in one industry, like Singapore's robust financial services space or Japan's established manufacturing sector, a huge advantage as they naturally attract more of the same kind of data and services – and with the businesses. This also makes it more challenging to attract opportunities away from them," said Dave McCrory, who coined the term Data Gravity in 2010 and led the research.

"For businesses, it's less advantageous. Data has become a key strategic resource, but data gravity means too much of it can be difficult to use and impossible to move while constantly creating and attracting more," McCrory added.  

Companies also need more processing power to manage the data, and the demand for access to quantum computing will increase. The report noted that by 2024, as a whole, Forbes Global 2000 Enterprises will have accrued enough data to need access to quantum computing to effectively handle it. They will need an additional 325 exaFLOPs — 6 exaFLOPs per business — of computing power and 124 exabytes of private data storage to effectively manage their enterprise data. Comparatively, IBM's next quantum computer will run at just 1.5 exaFLOPs by 2021.

"Enterprises are fast becoming the world's data steward and are required to operate on-demand and ubiquitously to succeed. APAC's major economies, such as China and Japan, are expected to experience high growth in the enterprise data management market. Understanding the importance of data gravity helps enterprises better understand what's required to enhance their business architectures and management of enterprise data. This can lead to better enterprise workflow performance, better security, and cost-savings in the long run as data continues to be the digital economy's currency," said Mark Smith, managing director for Asia Pacific at Digital Realty.

Image credit: iStockphoto/carlotoffolo