Thailand should offer more incentives to the business sector to use cloud and data centre services, making such facilities critical infrastructure, according to cloud and data centre providers in Thailand.
These services will support the country’s goal of becoming a regional cloud and data centre hub, said the firms.
Under the Digital Economy and Society Ministry’s “Go Cloud First” policy, the country is eager to lure investment from foreign cloud and data centre providers.
Recently Prime Minister Srettha Thavisin said the country expected to receive investment of at least US$5 billion from Tesla, Google and Microsoft. The premier said Microsoft and Google are looking at data centre investment.
Last year Google announced a plan to create its first cloud region in Thailand to capture the growing demand for cloud computing services in Thailand and internationally.
Global players’ cloud and data centre investment in Thailand began many years ago, with the pioneers including Tencent Cloud, Huawei and NTT, followed by Alibaba Cloud, Amazon Web Services (AWS) and Google Cloud. Chinese players Tencent and Huawei have five cloud data centres in Thailand.
Recently two Japan-based data centre providers, Telehouse and NTT, invested $164 million in Thailand to build and expand data centres, cashing in on the trend of digital transformation and the exponential growth of cloud computing.
Vatsun Thirapatarapong, country manager at AWS Thailand, said a greater number of cloud and data centre providers in Thailand will strengthen the country’s potential to become the regional hub.
More choices of services will benefit the users and accelerate the country’s digital transformation, he said.
Last year AWS announced its plan to invest $5 billion in Thailand over the next 15 years.
Mr Vatsun suggested the government offer more tax incentives to the business sector to encourage them to adopt the cloud service.
For example, companies should be allowed to use the expenses from using cloud services to claim tax exemption and at a rate higher than those of other categories, such as the purchase of IT equipment.
He said by offering the right incentives, Thailand will be able to lure more investment, particularly investment in the data centre GPUs (graphics processing units) system which supports the use of emerging technologies such as generative artificial intelligence and other advanced workloads.
Supparat Sivapetchranat Singhara na Ayutthaya, chief executive of ST Telemedia Global Data Centres (Thailand) (STT GDC Thailand), said one of Thailand’s key strengths to draw data centre investment is its geographical location.
STT GDC Thailand is a joint venture between Frasers Property and Singapore-based ST Telemedia Global Data Centres.
He said Thailand sits on a north-south corridor running from China to Singapore and an east-west corridor spanning from India to Vietnam.
From an Asean perspective, Thailand is a natural choice as a complementary location to the Singapore and Malaysia hubs. Its closer proximity to China also offers lower network latency.
Mr Supparat said location alone is insufficient to turn Thailand into a hub of cloud and data centres. The government should ensure it has overall stable policies as the data centre establishment requires long-term investment, he said.
Policymakers should deem data centres as critical infrastructure and offer attractive investment incentives, similar to other countries, said Mr Supparat, proving Thailand is serious about attracting cloud providers and data centre investment.
He said the country also needs clear energy policies that will result in competitive power rates and greater access to renewable energies.
Mr Supparat said the value of the local data centre industry is expected reach 200 billion baht within five years.
Among the key sectors that will benefit from the data centre industry are mechanical and electrical, property and energy.
Farming will also benefit with the advent of Agriculture 2.0 in which farmers will be encouraged to generate carbon credits and sell them to data centre operators to offset the latter’s carbon footprint.
Pichet Ketruam, country manager of Vertiv Thailand and Indochina, said for the past three years Thailand has been at the same competitive position as other Asean countries.
Over-the-top (OTT) players and the top 20 cloud or colocation data centre providers will invest in each country, depending on certain favourable factors, such as government incentives, local customers and local partners.
He said many big names in the cloud and data centre sectors such as Google, CtrlS and Microsoft have announced investment in or are considering investing in Thailand, while other big players have invested in Indonesia and Malaysia.
Mr Pichet said OTT players may entrust big local cloud providers to build and manage all data centre facilities for them and in most cases one OTT firm will work with more than one local data centre provider.
For smaller local data centre providers, the impact of losing their enterprise customers to bigger rivals will not be felt in the short term as the bigger players are not seeking small and medium-sized customers.