Data centres across Asia are growing at an unprecedented pace, making the region home to the second largest number of data centres globally, just behind the United States. The region is poised to account for 40% of the world’s total capacity. This rapid growth underscores the critical need for robust risk management throughout the data centre lifecycle.
Marsh is the trusted broker for more than 80% of the world’s largest cloud service and data centre providers, and a leader in advising on data centre lifecycle risks. These risks include construction disputes and delays, operational disruptions caused by power outages, cooling failures, physical and environmental threats such as extreme weather and natural disasters, and cybersecurity and data privacy concerns.
Fred Chuan, from Marsh Asia’s High-Tech Engineering Team, and Larry Liu, Marsh Asia Communications, Media and Technology Industry Leader, share practical insights for data centre operators on how to mitigate operational disruptions caused by power outages and cooling failures, and tips on how to protect critical digital infrastructure.
1. Managing risks from lithium-ion batteries and UPS systems amid challenges posed by renewable energy
With the growing reliance on renewable energy, data centres increasingly depend on battery storage and uninterruptible power supply (UPS) systems to maintain consistent power. However, these backup systems introduce risks such as power inconsistencies, thermal runaway fires, and generator failures that can cause prolonged outages.
Why redundancy alone isn’t enough: Lessons from an 11-hour outage ensued
A data centre experienced an 11-hour outage due to UPS system failures and unstable utility power causing rapid switching between primary and redundant UPS units. This incident highlights that redundancy must be complemented by thorough assessments, annual inspections, and annual testing to uncover hidden faults and prevent outages.
“Ensuring consistent and reliable energy starts with thoughtful facility design. Proper storage, continuous monitoring, regular maintenance of batteries and UPS systems, and frequent inspections are crucial to prevent outages.”
- Fred Chuan, Marsh Asia High-Tech Engineering
2. Minimising downtime from cooling system failures to safeguard against regulatory penalties
In October 2023, a cooling system failure at a major data centre disrupted online banking services for two major banks in Asia for nearly 14 hours, affecting millions of transactions. The root cause was a contractor error during maintenance, compounded by technical issues at backup sites. This incident resulted in regulatory penalties and operational restrictions.
“Cooling systems are essential to prevent server overheating and equipment failure. Implementing N+1 redundancy, ensuring backup power, using fire-resistant materials, and conducting regular inspections and maintenance are critical to ensure continuous, reliable cooling and avoid costly disruptions. The recent incident that impacted 2.5 million bank transactions can be used as a lesson.”
- Fred Chuan, Marsh Asia High-Tech Engineering
“Property Damage and Business Interruption (PDBI) insurance, along with Contingent Business Interruption (CBI) coverage, are essential safeguards that provide the financial support needed to repair damage and maintain operations during unexpected disruptions, ensuring business resilience in the face of adversity.”
- Larry Liu, Marsh Asia Communications, Media and Technology Industry Leader
Why Marsh?
Marsh has over 70 years of proven experience in Asia and is the trusted broker for more than 80% of the world’s largest cloud service and data centre providers. With deep expertise across Asia, Marsh helps operators design safer facilities, implement effective risk mitigation strategies, and secure tailored insurance solutions to keep data centres running smoothly — even in the face of unexpected challenges.
How can data centre operators implement robust risk management to keep pace with rapid growth throughout their lifecycle?
Contact us today to learn how Marsh Asia can help protect your critical infrastructure and ensure operational resilience.