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Market Insight: Japan Is A Data Center Powerhouse And Here’s Why

Japan Data Centres

Japan is the world’s third largest national economy, after the USA and China. Its geography results in the archipelago being a major subsea cable interconnection point between Asia and North America.

With a population of 126 million, Japan is a highly urbanized country with an Internet literacy rate of 93%.

Japan is ranked the world’s second most innovative nation on the Bloomberg Innovation Index, and is also the largest data center services market in the Asia Pacific region. The country benefits from one of the world’s most advanced telecommunications networks, with 63 million fixed line telephone subscriptions and 158 million mobile subscriptions.

Well-known for its electronics industry, Japan is also a leading nation in the fields of technology, robotics, machinery, scientific research and medical research. The country is home to many multinational conglomerates such as Fuji, Sony, Panasonic, Canon, Toshiba, Toyota, Honda, Nissan, Mazda and Mitsubishi.

As with other aspects of Japanese society, the nation’s data center market has its own unique practices. For example, Japan follows its own availability standards developed by the Japan Data Center Council, rather than internationally recognized standards from organizations such as the Uptime Institute and Telecommunications Industry Association (TIA).  Japanese regulators also enforce strict building codes to mitigate the constant risk of earthquake.

Japan is a data center powerhouse containing several data center clusters offering many colocation opportunities, with 147 data centers, 183 service providers and four network fabrics throughout the country. The primary colocation markets are Tokyo, Osaka and Nagoya. Based on a combined data center density and connectivity score, Tokyo earned the #17 spot in Cloudscene’s Fast 50 Markets to Colocate in 2018.

The most connected colocation data centers in Japan are predominately operated by Equinix, which occupies the top five spots within Cloudscene’s top ten ranking for this market:

  1. Tokyo TY2 – Equinix
  2. Tokyo TY1 – Equinix
  3. Tokyo TY3 – Equinix – Tokyo
  4. Tokyo TY4 – Equinix – Tokyo
  5. Osaka 0S1 – Equinix – Osaka
  6. Tokyo No.6 Data Center – NTT Communications
  7. Tokyo Chuo – @Tokyo
  8. Osaka 2 Data Center – NTT Communications
  9. Osaka 3 Data Center – NTT Communications
  10. Tokyo MCDR Mitaka – Digital Realty

This ecosystem-style ranking is unique to Cloudscene and is calculated based on the number of known service providers in each facility.

Equinix’s TY2 data center takes the number-one spot, a state-of-the-art International Business Exchange™ (IBX) facility that connects its customers to 85 providers and three network fabrics. TY2 is housed in a 7-story steel and reinforced concrete building, located ten minutes from Haneda Airport. Major service providers in the center include Colt, Level 3 Communications, Cogent Communications, Verizon, AT&T and Tata Communications.

Digital Realty opened its first Japanese data center in Osaka last year. The Osaka facility includes 93,000 square feet of floor space and 7.6 MW of IT capacity. The data center was fully leased prior to opening, reflecting strong demand in the local market.

“The development of our Osaka connected campus will enable us to further expand our world-class data center platform and support our customers’ rapidly growing demand here and around the world,” said Digital Realty Asia Pacific Managing Director, Edward Ligase.

In 2016, Google launched its first Japanese cloud region in Tokyo, and its second in Asia Pacific. Each Google cloud region incorporates at least two data centers, and the company now has 15 cloud regions and 44 facilities across the world.

Google generated $4 billion in cloud revenue in 2017, and the company is building additional data centers in Japan, with plans to launch another Cloud Platform region in Osaka in 2019. Google’s Osaka infrastructure will include three data centers, creating the Internet giant’s second cloud region in Japan and the seventh in Asia Pacific (with Hong Kong to open shortly as number six).

“Osaka is a large port city and a leading commercial center, and will be our seventh region in Asia Pacific, joining our future region in Hong Kong, and existing regions in Mumbai, Sydney, Singapore, Taiwan and Tokyo,” said Google Cloud Japan Managing Director, Shinichi Abe. “Customers will benefit from lower latency for their cloud-based workloads and data. The region is also designed for high availability, launching with three zones to protect against service disruptions.”

Global enterprise software company, Salesforce recently opened its second data center in Japan as business in the region booms. The new facility in Kobe is designed to deliver Saleforce’s Intelligent Customer Success Platform, which includes Service Cloud, App Cloud, Sales Cloud, Analytics Cloud and Community Cloud. Salesforce claims these solutions are made smarter by using Einstein, an integrated set of AI technologies for CRM.

“The new data center will support the unprecedented growth we’ve seen in the region and further accelerate the adoption of the Intelligent Customer Success Platform. This is one of our commitments to Japan,” said Salesforce Japan CEO, Shinichi Koide.

Oracle is also planning to open a new data center in Japan, part of the company’s push to create twelve new cloud regions across Asia, Europe and the Americas. Five of the new facilities will be in Asia (Japan, China, India, Singapore and South Korea). Oracle has also recently acquired security startup Zenedge to help expand the company’s cloud security portfolio.

“The future of IT is autonomous. With our expanded, modern data centers, Oracle is uniquely suited to deliver the most autonomous technologies in the world,” said Oracle CEO, Mark Hurd.

Meanwhile, Japanese IT firm NEC plans to spend US$186 million building two data centers in Kobe and Nagoya to support growing demand from US-based hyperscale cloud companies. The new facilities are due to be completed by April next year.

And finally, Colt Technology Services launched its second Japanese data center in Inzai last October, as the company attempts to tap into the colocation market – an industry in which global revenues are predicted to reach $14 billion this year. The Inzai 2 facility includes 54,000 square feet of floor space across six floors, and sits alongside the 43,000-square-foot Inzai 1, which was completed in 2011.

“As a carrier-neutral site, Inzai 2 will enhance our Core to Edge strategy, where we intend to connect our data centers together to provide our customers with flexible expansion solutions across our portfolio in the region,” said Colt CEO, Deter Spang.

To find data centers in Japan, take a look at Cloudscene’s Japan market page, or use our tool to compare Japan to other international markets.

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