Alibaba plans to build $1 billion data centre in Vietnam

Alibaba is renting space for computer servers from two leading Vietnamese telecom groups - Viettel and VNPT. The plan to build a data centre comes from a government decree promulgated in 2022 that Vietnam asked foreign-invested enterprises to have their particular data centres to store users’ data within the country’s territories.

Dang Minh Tam, solution architect lead at Alibaba Cloud, said that the company cooperated with Viettel and VNPT via the colocation method, which is a term for renting out space from data centre operators of these state-owned enterprises to park client data locally.

Tam did not disclose the specific timeline of the centre’s construction.

The data centre market in Vietnam is forecast to reach $1.26 billion by 2030, with a compound annual growth rate of 10.8 per cent, according to the latest report from Viettel IDC published in May.

Despite the potential opportunities and market momentum, Vietnam remains relatively slow to grow compared to its regional peers. Vietnam, a promising market, but lags behind other countries in terms of size. Currently, the country's data centre market is only a small fraction of the size of Singapore, Malaysia, and Indonesia.

Looking at the past three years from 2020 to 2022, the data centre market in Indonesia and Malaysia has grown about six-fold, while Vietnam has grown only 1.5 times.

Four major domestic providers in Vietnam, such as Viettel, VNPT, FPT and CMC, dominate the data centre market, holding approximately 97 per cent of market share.