As Vietnam’s data production surges and data localization laws come into play, the demand for data centers has outpaced supply. Private sector, both local and foreign, is investing heavily to meet this demand, while the government is mobilizing funds. The approved National Data Center Project aims to bridge the gap and fulfill the country’s growing need for robust data infrastructure.
The National Data Center Project
The National Data Center Project aims to establish a national data center tasked with storing Vietnam’s government data. With Vietnam actively digitizing its public sector, there is a growing need to securely store significantly larger volumes of data. Consequently, the data center is envisioned as a cutting-edge facility that adheres to the highest standards in technology and security.
The development of the National Data Center is guided by several overarching objectives
– Data Storage and Tracking: Store and manage government data pertaining to population, health and social security, education and training, identification, civil status, and financial activities.
– Data Collation and Analysis: Aggregate and analyze data to streamline administrative procedures, enhancing public services for both citizens and businesses. This encompasses the formulation and development of policies and strategies.
– Security and Integrity: Ensure the safety and security of the data collected by the Government of Vietnam, along with safeguarding its digital platforms and infrastructure.
– International Collaboration: Facilitate information exchange with international partners for research purposes, contributing to the advancement of Vietnam’s science and technology sector.
Vietnam is striving to advance to the forefront of e-government and has set ambitious goals to be among the global leaders by 2025. Specifically, the country aims to achieve significant milestones in various key areas of e-governance
– Top 70 leading countries in e-Government
– Top 50 leading countries in information technology
– Top 40 leading countries in cyber safety and security (Global Competitiveness Index – GCI)
Additionally, by the year 2030, Vietnam is targeting further advancements to be positioned among the top:
– Top 50 leading countries in e-Government
– Top 30 leading countries in information technology
– Top 30 leading countries in cyber safety and security
The National Data Center Project is expected to play a crucial role in propelling Vietnam towards these objectives. In alignment with broader digital economic goals, Vietnam aims for its digital economy to contribute approximately 20 percent to GDP by 2025 and increase to 30 percent by 2030, as outlined in the Resolution.
Regarding financing, the State Budget is earmarked as the primary funding source for the National Data Center Project’s development. However, the Resolution allows for potential private investment. Notably, project managers are open to collaboration with businesses, especially in areas such as the training and development of high-quality technical personnel.
The initial National Data Center (NDC1) is slated for development at Hoa Lac High-Tech Park in Hanoi City. Future data center locations will be determined in accordance with information and communication infrastructure planning.
Each National Data Center will comprise two facilities. One is dedicated to specific areas and functions (not specified), while the other accommodates 1,000 racks for shared use among ministries and their branches. The infrastructure will also include administrative buildings, conference spaces, network monitoring centers, and other essential features for effective management.
NDC1 is anticipated to span approximately 150,000 m2, housing one data center with 1,000 racks and another with 300 racks, along with auxiliary structures to support around 1,000 workers.
Legislation – Though the Resolution allows for several years to develop and strengthen the legal framework around the collection and storage of data for the National Data Center, there are already a number of laws governing data protection in place.
Resolution 175/NQ-CP outlines a specific timeline for implementation, indicating that
By 2025:
– Establish and operationalize a general data warehouse.
– Collect and organize data from both citizens and foreigners residing in Vietnam.
By the End of 2025:
– Complete and make operational a comprehensive data warehouse (as opposed to a general one).
– Utilize this facility for in-depth analysis of various socio-economic metrics.
– Integrate it with international data exchange systems for research purposes.
By 2030:
– Finalize the National Data Center Project with specialized databases.
– Integrate the center with domestic information systems, particularly those of government organizations.
– Target a 90 percent completion rate of administrative procedures between state agencies utilizing the National Data Center.
– Aim for a 95 percent user satisfaction rate with the handling of administrative procedures through the center.
Data center development in Vietnam for foreign firms
While this Resolution is focused on a government project, it aligns with the increasing emphasis on data storage in Vietnam. This is anticipated to further stimulate interest and growth in the sector. Foreign companies operating in the data center industry might see this as an opportune moment to enter this burgeoning market, especially given the emphasis on developing data centers being a top priority for influential decision-makers.
Vietnam’s data center industry is experiencing significant growth, as indicated by reports from Mordor Intelligence and Arizton Advisory and Intelligence
According to Mordor Intelligence, the Vietnam Data Center Market is expected to achieve a Compound Annual Growth Rate (CAGR) of 8.84 percent by 2029. The primary locations for data centers in the country are Hanoi and Ho Chi Minh City. The report notes that the majority of data centers in the region are tier 3 facilities, with a gradual shift towards meeting tier 4 DC standards.
Arizton Advisory and Intelligence have valued Vietnam’s data center market at US$ 561 Million in 2022. Their projections anticipate substantial growth, with the market size expected to reach US$ 1,037 Million by 2028, reflecting a Compounded Average Growth Rate (CAGR) of 10.78 percent.
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