Alibaba to build Vietnam data centre in response to local storage law

Alibaba Vietnam data centre: Alibaba, the Chinese tech giant, plans to construct a data center in Vietnam to comply with a 2022 law mandating local data storage, according to a report by Nikkei Asia. This move comes after the company previously relied on renting space from state-owned telecom providers Viettel and VNPT.

Data localisation law drives shift

Vietnam's 2022 data localisation law requires companies to store user data locally, prompting resistance from tech giants like Google and Amazon. Despite opposition, the law was implemented, leading businesses to seek alternative solutions.

Alibaba currently uses colocation, renting space from Viettel and VNPT for data storage. To ensure regional redundancy, they also maintain backup servers in locations like Taiwan and Singapore. Recognising Vietnam's growth potential, Alibaba plans to build its own data center in the country, but details like cost and timeline remain undisclosed, according to the report.

While colocation offers cost benefits, companies like Alibaba value the enhanced security and control of their own data centers. Legal complexities and potential liability issues arise when multiple entities manage data storage.

Vietnam's data centre market

Local companies share Alibaba's optimism for Vietnam's data center market growth. Viettel IDC, a data center operator run by Vietnam's military, has witnessed increased demand for environmentally friendly data storage solutions, the report said. Viettel aims to incorporate renewable energy sources into its operations, targeting 30 per cent renewable energy consumption by 2030, it added.

The data center market is estimated to expand by 15 per cent annually, potentially accelerated by a major player like Alibaba entering the space.