A data centre of VNPT recently opened in Hoà Lạc Hi-tech Park. The data centre and cloud computing services market in Việt Nam has high potential as the country is promoting digital economy development. — VNA/VNS Photo

HÀ NỘI — The data centre and cloud computing services market in Việt Nam has large potential as the country is promoting digital economy development, according to the Việt Nam Cloud Computing and Data Centre Club (VNCDC), a member of the Việt Nam Internet Association (VIA).

According to VNCDC Việt Nam is considered one of the fastest growing markets in ASEAN in terms of cloud computing and data centre market, and has seen the participation of more than 50 providers, both domestic and foreign.

Cloud computing and data centres play an important role in shaping digital infrastructure in Việt Nam together with broadband telecommunications infrastructure and Internet of Things (IoT) infrastructure.

The Prime Minister has approved the National Digital Transformation Programme until 2025 with a vision to 2030 with three pillars: digital government, digital economy and digital society, in which the strategy of “moving to the cloud” is considered important to help enterprises develop in a digital economy.

This provides great opportunities for Việt Nam’s data centre and cloud computing to accelerate and create a breakthrough, VNCDC said.

“Vietnamese cloud computing and data centre companies have mastered technology, have good growth rates and are capable of competing with foreign rivals in meeting enterprises’ demand to “move to the cloud”, making Việt Nam an important digital centre of ASEAN,” VNCDC’s Deputy Head Đặng Tùng Sơn said.

A report by VNCDC published within the framework of Internet Day 2023 held by VIA on Wednesday in Hà Nội showes that the demand for cloud computing in Việt Nam doubled in 2022 to reach VNĐ9.7 trillion.

This dramatic growth was driven by the COVID-19 pandemic which urged enterprises to speed up digital transformation.

However, the growth is slowing down in 2023 largely due to the impact of economic recession forcing firms to cut costs. Still, the cloud computing market expanded at 24.2 per cent this year.

The cloud computing market draws the participation of big domestic tech companies such as Viettel, VNPT, CMC and FPT which saw revenue increase from VNĐ900 billion in 2021 to VNĐ2.3 trillion in 2022 with an average growth rate of 37.4 per cent.

However, domestic providers hold a modest market share of 20 per cent while the rest is in the hands of foreign rivals.

The report predicts that the cloud computing market will grow at a compound rate of 20-23 per cent in 2023-25 period to reach $768 million in 2025.

Regarding data centres, a report by Research and Markets shows that the data centre market will grow at a compounded annual growth rate of 10.68 per cent in the 2022-28 period to increase from $561 million in 2022 to $1.037 billion in 2028.

This market is attracting huge investment from both foreign and domestic providers. Domestic names include big tech companies like VNPT, Viettel, CMC and FPT which are focusing on developing modern data centres of international standard.

Still, domestic players accounted for a modest market share of 17 per cent.

The Government’s Decree 53/2022/NĐ-CP detailing the implementation of the Law on Cybersecurity has tightened data management, which would push up demand for data centre services.

Domestic data centre services providers said that the data centre market would develop rapidly in the next two years, thus, they all have plans for expanding the infrastructure system.

In the digital infrastructure strategy to 2025 with a vision to 2030, the Ministry of Information and Communications set the target to expand the cloud computing market shares of domestic services providers to 70 per cent by 2025, which is challenging, VNCDC said.

At the same time, Việt Nam set the goal that the digital economy would account for 20 per cent of GDP by 2025 and 30 per cent by 2030. Accordingly, the ICT industry must contribute 6-6.5 per cent, in which cloud computing enterprises would contribute 1 per cent of GDP.

VNCDC’s survey revealed that more than half of service providers found existing legal frameworks were supporting their development at “normal” level.

“It’s necessary to improve the legal framework for data centres and cloud computing in Việt Nam to be able to compete with foreign big tech companies and create breakthroughs,” VNCDC said.