), the world's most popular Internet search engine provider, has
opened two Asian data centers in Taiwan and Singapore, to meet
the fast-growing demand for Internet usage and data storage
Taiwanese data center
, built on 15 hectares of land, is situated near wind turbines at
the coastal industrial park. To improve its energy efficiency,
the company uses nighttime cooling and thermal energy storage
system. The system cools water at night when temperatures are
lower which is then stored in large insulated tanks before being
pumped throughout the facility during the day. This helps Google
to reduce its power bill as electricity rates are lower at
Google believes this facility to be one of Asia's most
efficient and environment-friendly data centers and so has
increased its investment to $600 million from $300 million.
is a multi-story data center situated on 2.45 hectares of land in
Jurong West. The data center has been built next to a primary
school and publicly-run housing (called HDBs). To conserve water,
this facility will pump recycled water through tubes to cool
their servers during hotter days.
The world's fastest growing consumer technology markets,
Singapore and Taiwan, offer well-established data privacy
policies, a highly trained workforce, a fiber broadband
infrastructure and reliable power. All these factors attract the
major Internet companies to invest in these markets.
) have already been increasing their presence in Asia in the
The need for data center expansion is rising due to the
growing demand for cloud computing and the ever-increasing needs
of Internet users. The data centers comprise computer servers
that process everything from Internet searches to emails,
inquiries to maps, videos and other services.
Google's investment to expand its data centers comes as no
surprise given the need for more data-intensive services, such as
Google search, Gmail, Google+ and YouTube services in Asia. We
believe these two centers should speed up performance of
Google-based sites and services in the region. Currently, Google
has 19 data centers worldwide, with 70 offices in more than 40
countries employing some 30,000 people.
The U.S. independent research firm, Gartner, predicts that
data-center hardware spending will most likely cross $126.2
billion in 2015. These technology warehouses are witnessing
strength, as video streaming, smartphones and apps are boosting
the demand for hard drives on which they run.
Google believes that the number of users accessing the
Internet, particularly through mobile devices, has rocketed in
the past two years in Asia. Per Google's figures, the number of
Internet users in India doubled from 100 million to 200 million,
while 60 million people in Asia used the Internet from a mobile
device in the third quarter of 2013.
Going by the above numbers, we believe that there is much room
for further growth in this region.
However, the company's decision to open a third data centre in
Hong Kong has been scrapped for now.
Google has done very well in the third quarter, with its
earnings exceeding the Zacks Consensus Estimate due to solid
growth in the core business, a growing digital business, good
cost control and a lower tax rate. However, its ad technology has
not kept up, leading to poorer ROI for advertisers, which has
affected spending on Google platforms.
Currently, Google has a Zacks Rank #3 (Hold).
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