SINGAPORE'S RACKS CENTRAL ENTERS CHINA MARKET WITH NEW SHANGHAI [...]

📅 juni 7, 2019 - Shanghai (January 11, 2019)
Summary: Singapore's Racks Central brought online a new data centre in Shanghai located in the Zizhu High-tech zone, Minhang district just south of Shanghai. We caught up with management to get more details on capacity and its anchor tenant deal.

Details: The Dingxiang Shanghai Zizhu Data Center is a joint venture project, located in Shanghai Zizhu Park, with a gross data center area of ​​10k sqm and 1,200 cabinets of total rack capacity (or around 3.6 MW of IT load capacity). The facility was designed by i3 Solutions, a local Singapore firm, to adhere to the ANSI/TIA942 Rated-3 (or tier 3 equivalent) standard.

Anchor tenant: The anchor customer is Beijing Dingxiang Technologies, a service provider of internet business security and risk control solutions. Dingxiang Technologies was founded in April 2017 and is a member of Sequoia Capital China. Management confirmed that Dingxiang Technologies has completed the deployment of more than 600 cabinets within the Shanghai Zizhu Data Center and is expected to take up the remaining cabinet capacity by early 2020.

Ownership: Singapore's Racks Central was responsible for the data centre construction, and Dingxiang Technologies will take care of the ongoing data centre operations and maintenance. Racks Central formed a local entity named Shanghai Think IT Solutions for its Chinese data centre business led by CEO Michael Ong who was formerly GM of APAC at Softlayer and also the former GM at Racks Central Singapore.

Angle: Racks Central was able to secure an attractive location just outside of the core Shanghai metro area and essentially did a built to suit type deal with a local Chinese IT security firm that was likely looking at a more targeted and customized build at a nominal power density of around 3kw per rack. Dingxiang likely wanted a dedicated data centre build for its sub-hyperscale requirements and did want to enter a multi-tenant situation within a larger colocation data centre due to the security angle of its business. How big of a market in China is there for these types of medium size, dedicated data centre builds is unclear although Racks Central has proven that is able to successfully pull of an organic market entry in China (albeit through a necessary joint-venture relationship) and is the first Singapore colocation provider to do so that we are aware of. Management confirmed that Racks Central plans to grow and expand in other strategic locations in China such as Beijing and Guangzhou. Its value proposition will continue to be supporting Chinese enterprises that are looking to expand their data centre footprint outside of China and be their partner locally within China.