Zoom Launches New Singapore Data Center Following Backlash

The videoconferencing superstar opens its first data center in Southeast Asia as demand for Zoom in the region surges.

Zoom Video Communications has opened a new data center in Singapore after the region briefly halted the use of the videoconferencing superstar for home-based education following reports that hackers were breaking in and posting obscene images.

The opening of Zoom’s first data center in Southeast Asia comes as the San Jose, Calif.-based company sees a surge in usage and demand stemming from the coronavirus pandemic, which has caused a spike in remote working around the world. Since January, Zoom has seen a 65-fold increase in users of its free service in Singapore as well as a tripling of the amount of paying customers in the region.

In April, Singapore temporarily suspended the use of Zoom by educators after reported incidents of hackers posting obscene images on screens during virtual classes.

In addition, Zoom said this year that it had mistakenly routed some video meeting traffic through servers in China, which caused backlash from several government agencies as well as other companies over fears of Chinese surveillance.

[Related: Gartner’s Data Center Backup And Recovery Magic Quadrant Leaders]

Zoom, for its part, recently cut off its direct sales force in mainland China and will only be selling online videoconferencing services in the country through authorized third-party partners. The move to a partner-only selling model in China takes effect Aug. 23. Zoom also suspended the online subscription model for its China-based services in June.

On the data center front, Zoom has taken its mainland China data centers off an approved list of backups for users outside China.

To boost its encryption capabilities, Zoom acquired secure messaging and file-sharing services specialist Keybase in May.

Zoom’s new Singapore data center makes a total of 18 Zoom sites available around the globe. The company said in a briefing this week it will also hire more employees in the region such as engineers and sales staff. Zoom said it worked with Singapore’s Economic Development Board when building the data center.

The COVID-19 pandemic isn’t slowing down the rate of data center construction by some of the largest and fastest-growing companies in the world.

Amazon Web Services, Google, Oracle and Microsoft are spending billions on building and equipping new hyperscale data centers around the globe. The total number of large data centers operated by hyperscale providers jumped to 541 at the end of the second quarter of 2020, according to new data from Synergy Research Group.

“COVID-19 has caused some logistical issues but these are robust numbers, demonstrating the underlying strength of the services that are driving these investments,” said John Dinsdale, a chief analyst at Synergy Research Group.

In terms of geography, the U.S. accounts for nearly 40 percent of the major cloud and internet data center sites, with Europe, the Middle East and Africa (EMEA) and Asia-Pacific regions having the highest growth rates. The most popular locations for hyperscale data centers are in Australia, China, Germany, Japan and the U.K., which combined account for about 30 percent of the total.

Singapore’s technology industry saw a rise of 24 percent in overall deal activity during the second quarter of 2020 when compared with the prior four-quarter average, according to GlobalData’s deals database. A total of 67 deals worth $462 million were announced in second quarter, compared to the last fourth-quarter average of 54 deals.