Nikkei Asia shared that the Chinese tech giant is currently renting space for computer servers from two leading Vietnamese telecom groups - Viettel (run by the army) and VNPT (Vietnam Posts and Telecommunications Group).

This comes following a government decree which took effect from October 1, 2022, that requires foreign firms to store users’ data in cyberspace within Vietnamese territories.

Nikkei quoted Dang Minh Tam, solution architect lead at Alibaba Cloud, as saying that the company uses colocation, which is a term for renting out space from data centre operators, partnering with the two state companies to park client data locally. But it also backs up data at its own server farms located across the region, from Taiwan (China) to Singapore.

Tam added that Alibaba plans to build a data hub in Vietnam in an effort to keep pace with demand in one of Asia’s fastest-growing economies.

The details of the cost and timeline for the project are yet to be made public.

However, he revealed that the cost of building a data centre could potentially exceed US$1 billion.

According to information provided by Nikkei Asia, in addition to cost considerations, the reason that companies like Alibaba might wish to build their own servers is to ensure greater security and control over their information.

Viettel IDC, which owns five of the biggest data centres in the country, predicted that the Vietnamese data centre market will expand by 15% each year for the foreseeable future, and the figure is likely to be higher if a big cloud company like Alibaba chooses to invest.

VOV