With Vietnam's rules on storing data locally causing a surge in demand, local data centre operators are apparently unable to cope. Thus Vietnam has decided that foreign investors can now own data centres in the country.
This is quite a major change of policy, though one that may not have been a surprise. It's partly down to the country’s Cybersecurity Law, which forced companies to keep data in Vietnam.
Nikkei Asia notes that Facebook and YouTube-owner Google have fought against data localisation. A number of countries are also reported to be monitoring Hanoi's compliance with trade deals that bar such localisation. But while localisation rules may not be changing, it's clear that the requirement to store data locally can also increase operational costs for companies. In addition domestic data centres may not find it easy to adhere to international standards of data security and privacy.
The recently passed Law on Telecommunications may ease that pressure. There are no longer any foreign ownership caps (which are just under 50% in some other industries) for data and cloud providers. Providers also have an exception from licensing.
The country may not be happy that it has been forced into this position but, given the speed of data demand growth (which we mentioned earlier this week), it’s likely that international players will pour resources into cloud computing and data farms. However, they still face the costs of localisation and may have to block content if requested to do so by competent state agencies.
Another encouraging recent sign is that the government is introducing direct power purchase agreements (DPPAs); these let companies buy renewable energy privately and not from the state utility.
