Vietnam’s National Data Center Project: Unpacked

Vietnam’s National Data Center Project has been approved by Resolution 175/NQ-CP. This is in line with the growing importance of data collection and storage in Vietnam. Here are the key takeaways.

Data centers and data center development are becoming more and more important in Vietnam as the volume of data the country produces rapidly expands and data localization laws force firms to store their data in the country.

This demand, however, has so far outstripped supply with Vietnam needing, by some estimates, at least five new 2,000-rack data centers each year.

This has not gone unnoticed either. The private sector in Vietnam, including both local and foreign firms, has been pouring money into the sector ready to cash in on this huge demand. The government is also moving to mobilize funds and investment in the sector to ensure the country’s public sector needs can be met.

It’s in this context, that the recently approved National Data Center Project has been developed.

See also: Vietnam’s Data Center Economy: Sector Insights and Key Regulation

What is the National Data Center Project?

The National Data Center Project will develop a national data center that will store Vietnam’s government data. As Vietnam moves toward greater digitization of its public sector, much bigger volumes of data will need to be stored and securely. The data center therefore has to be a state-of-the-art facility meeting the highest technology and security standards.

Objectives

The National Data Center is being developed with several broad objectives in mind. These are:

• To store and keep track of government data related to population, health and social security, education and training, identification, civil status, and financial activities.
• To collate data and perform analysis of said data in order to simplify administrative procedures and improve public services for both citizens and businesses. This includes planning and developing policies and strategies.
• To ensure that the data the Government of Vietnam collects, as well as its digital platforms and infrastructure, is kept safe and secure.
• Facilitate the exchange of information with international partners for research purposes in order to develop Vietnam’s science and technology sector.

Targets

Vietnam is aiming to move toward the forefront of e-government and intends to measure itself against global indicators. Specifically, by 2025, Vietnam aims to be among the:

• Top 70 leading countries in e-Government;
• Top 50 leading countries in information technology; and
• Top 40 leading countries in cyber safety and security (GCI).

On top of that, by 2030 Vietnam aims to improve further and be among the:

• Top 50 leading countries in e-Government;
• Top 30 leading countries in information technology; and
• Top 30 leading countries in cyber safety and security.

The National Data Center Project will also help Vietnam to reach its digital economy goals. Specifically, Vietnam is aiming for its digital economy to account for about 20 percent of GDP by 2025 and 30 percent of GDP by 2030, according to the Resolution.

These are ambitious targets and will require both huge commitment and foreign investment.

Financing

Whereas the State Budget has been identified as the primary source of funds to support the development of the National Data Center Project, the Resolution leaves the door open for private investment. In particular, the project managers will be looking for the support of businesses in the training and development of high-quality, technical personnel.

Technical information

The first National Data Center (NDC1) will be developed at Hoa Lac High-Tech Park, Hanoi City. Subsequent data centers will be determined at a later date but will be in line with information and communication infrastructure planning.

Each National Data Center will consist of two data centers. One data center will serve specific areas and functions (unspecified) and the other will contain 1,000 racks to be shared between the ministries and their branches. There will also be administrative buildings, conference spaces, and network monitoring centers among other features necessary for the national data center’s management.

It is expected that the NDC1 will cover about 150,000 m2 with one data center of 1,000 racks and the other containing 300 racks, and then auxiliary buildings catering to around 1,000 workers.

Note that the Resolution does not provide specific details on the rack size or capacity of the data centers in terms of data storage.

Legislation

Though the Resolution allows for several years to develop and strengthen the legal framework around the collection and storage of data for the National Data Center, there are already a number of laws governing data protection in place.

Personal Data Protection Decree

Regulations on the protection of personal data are outlined in Decree No. 13/2023/ND-CP. This decree covers the rights and responsibilities of individuals and organizations involved in data collection and processing, whether they are providing or requesting data. This includes how long it can be stored by which organization and how it should be handled in the event it is no longer needed.

See also: Vietnam’s Personal Data Protection Decree: A Quick Guide

Data localization

Last year, Vietnam introduced new data localization regulation requirements that would see both domestic and certain foreign companies required to store the personal data of Vietnamese clients locally. This particular legislation is mostly directed at foreign firms operating in Vietnam; however, it indicates how data should be treated and for what purposes data might be used (law enforcement most prominently) in the country.

On a side note, this is also driving investment by foreign forms in data centers in Vietnam as they work towards complying with these new regulations.

See also: How are Foreign Investors Responding to Vietnam’s New Data Localization Regulations

Timeline

Resolution 175/NQ-CP also provides a timeline for implementation. It states that:

• A general data warehouse should be built and put into operation by 2025. This includes collecting and collating data from citizens and foreigners living in Vietnam.
• By the end of 2025, there should be a comprehensive data warehouse (as opposed to a general data warehouse) complete and operational. It should be utilized to provide in-depth analysis across a broad range of socio-economic metrics. It should also be integrated with international data exchange systems for research purposes.
• By 2030, the project should be complete with specialized databases, and integrated with domestic information systems, in particular with government organizations. The target is for 90 percent of administrative procedures between state agencies to be completed utilizing the National Data Center. There is also a 95 percent target for user satisfaction with the handling of administrative procedures.

Data center development in Vietnam for foreign firms

Though this Resolution specifically pertains to a government project, it is in line with the rapidly growing interest in data storage in Vietnam and will likely only promote the sector even more. Foreign firms in the data center sector may find that this is the perfect time to enter this emerging market with the need to develop data centers at the forefront of the minds of key decision-makers.

For support developing data centers in Vietnam or legal support with regard to data storage, contact the business advisory experts at Dezan Shira and Associates.

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