Japan’s data center market is experiencing a significant transformation, with the hyperscale segment expanding rapidly while the enterprise sector sees slower growth. A recent EY report projects that the market will reach $30 billion by 2026, with a compound annual growth rate of 6.5%, driven by the growing demand for cloud services and digital infrastructure investments in the region.
Flow Digital Infrastructure, a part of Asia-Pacific investment firm PAG, is constructing a two-building, 30-MW colocation data center campus in central Tokyo. The first facility, TK7, with a capacity of 6 MW, is set to be operational by the first quarter of 2027. Similarly, Ares Management has closed its first data center development fund in Japan, raising $2.4 billion to build three campuses in the greater Tokyo area with a combined planned IT load of nearly 240 MW.
Hyperscale development in Japan is on the rise, with major operators like Google, Microsoft, and Amazon leading the way. These operators employ a dual strategy of building their own data centers while also leasing facilities from colocation providers. Japan ranks third globally in the colocation market, behind only the US and China, and is the second-largest market in the Asia-Pacific region.
Despite its prominent position in the data center market, Japan faces challenges due to the high costs of building and operating facilities. These costs make Japan less attractive as a location for regional hubs serving pan-regional customer bases. Additionally, long waits for power access and a shortage of construction capacity are significant barriers for developers in and around Tokyo.
Geographic restrictions near population centers like Tokyo and Osaka further complicate matters, as hyperscale operators have strict requirements for fiber network latency. Despite these challenges, suitable land within the required distance from city centers can still be found in both Tokyo and Osaka.
Japan’s data centers are known for their precision and reliability, with construction delays being rare and daily operations meticulous. As demand for digitalization, including advancements in AI, continues to grow, Japan’s data center market is poised for further expansion. While the country may be slow to initiate change, once momentum builds, Japan adapts rapidly to meet the evolving needs of the market.
Asaki pointed out several crucial advantages that support Japan’s data center industry:
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Solid Core Infrastructure. Japan features highly dependable electricity, telecommunications, and water supply systems crucial for efficient data center operations.
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High Safety Standards. The nation provides robust public safety measures, including stringent data and physical security protocols.
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Efficient Connectivity. Positioned strategically, Japan serves as a key hub for fiber connections from the US, catering to both local and global data demands.
Acknowledging the sector’s challenges, Asaki highlighted the prolonged processes required to secure power for data centers. He also mentioned current obstacles like community resistance, expressing confidence in their eventual resolution.
Growth Stable, Government Supporting
The data center market in Japan is set for steady expansion. Asaki pointed out a projected 20% annual growth over the next five years, driven by increasing demand in IT services due to digital transformation initiatives across various sectors.
Suzuki from NTT emphasized the government’s growing acknowledgment of data centers’ strategic importance. Efforts are underway to streamline infrastructure development processes.
One significant move involves simplifying land use regulations. The conversion of agricultural areas to industrial zones, previously taking several years, is now being expedited to accelerate data center construction.
Suzuki also highlighted enhancements in utility infrastructure. Collaborations with utility providers, including Tokyo Electric Power Company, aim to strengthen transmission networks connecting rural and urban regions.
“The Ministry of Economy and the Ministry of Internal Affairs are increasingly supportive of the data center sector,” Suzuki remarked.
Compared to its Asian counterparts, Japan presents a stable and attractive market for investments, free from political uncertainties, according to Suzuki.
“Japan offers some of the most significant opportunities, with stakeholders able to invest in data center infrastructure confidently,” Suzuki concluded.
“10 Ways to Improve Your Communication Skills”
Effective communication is a crucial skill that can positively impact all aspects of your life, from personal relationships to professional success. If you want to improve your communication skills, here are ten practical tips to help you become a better communicator:
1. Listen actively: One of the most important aspects of communication is listening. Pay attention to what the other person is saying without interrupting or thinking about your response. Show that you are engaged by nodding, making eye contact, and asking relevant questions.
2. Be mindful of your body language: Nonverbal cues can speak volumes in communication. Maintain good posture, make eye contact, and avoid crossing your arms or fidgeting. Your body language should convey openness and attentiveness.
3. Practice empathy: Put yourself in the other person’s shoes and try to understand their perspective. Empathy is key to building trust and rapport in communication. Show that you care about their feelings and opinions.
4. Use clear and concise language: Avoid jargon and complicated language that can confuse the listener. Be direct and to the point in your communication. Use simple and easy-to-understand words to convey your message effectively.
5. Ask for feedback: Solicit feedback from others to understand how your communication style is perceived. Be open to constructive criticism and willing to make adjustments to improve your communication skills.
6. Be assertive: Assertiveness is about expressing your thoughts and feelings in a confident and respectful manner. Stand up for yourself while also considering the needs and feelings of others. Avoid being passive or aggressive in your communication.
7. Practice active listening: Show that you are fully engaged in the conversation by paraphrasing what the other person has said and asking clarifying questions. Reflect back their words to demonstrate that you understand and value their perspective.
8. Be mindful of your tone: The tone of your voice can greatly impact how your message is received. Speak in a calm and respectful tone, avoiding sarcasm or aggression. Pay attention to your tone to ensure that it matches the content of your message.
9. Seek to understand before being understood: Instead of focusing solely on getting your point across, take the time to understand the other person’s viewpoint. Ask questions to clarify their thoughts and feelings before expressing your own.
10. Practice active listening: Actively listening to others is key to effective communication. Show that you are engaged in the conversation by maintaining eye contact, nodding, and providing verbal cues such as “I see” or “That makes sense.” By actively listening, you demonstrate that you value the other person’s perspective and are invested in the conversation.
By implementing these ten tips, you can improve your communication skills and become a more effective communicator in all areas of your life. Remember that communication is a two-way street, and it requires both speaking and listening effectively. Practice these skills regularly to see positive changes in your relationships and interactions with others.
