Hong Kong to remain Asia-Pacific hub for data centres: Frost & Sullivan
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Hong Kong is likely to remain a key data-centre market in the Asia-Pacific region in the near future despite limited availability of suitable land and high real-estate prices, says business consultancy Frost & Sullivan.
Danni Xu, research analyst for ICT practice, Asia-Pacific, at Frost & Sullivan, said the Hong Kong government’s continuous support would see the city remain a key market in the data-centre sector.
She added that Hong Kong’s strong political connection to mainland China allowed it to act as a gateway for global companies that seek to tap into opportunities in China’s market.
“Moreover, Hong Kong’s business-friendly and free-trade environment has drawn a number of multinational corporations to set up their regional headquarters [there]. This has brought in numerous investments and job opportunities, and created demand for data-centre services,” she said.
Xu said the Hong Kong data-centre market was expected to see a compound annual growth rate of 15.3 per cent to around US$800 million (Bt25 million) by 2019.
However, she added that service providers might choose to locate a part of their facilities outside Hong Kong to reduce their capital and operating expenditures and tap into the increasing demand for business-continuity planning and disaster-recovery services.
Xu said cloud computing had emerged as the fastest-growing segment of the data-centre market over the past three years and helped to add value to service providers’ traditional portfolios. This created new revenue streams and led to strong growth in revenue.
Frost & Sullivan estimates that each dollar spent on cloud services drives an additional spending of 20-25 cents on other services, such as connectivity services, hosting services, and information security services.
Xu said the popularisation of cloud computing had led to the emergence of cloud-centric data centres, such as CITIC Telecom’s cloud centres and Pacnet’s HKCloudSpace2 data centre, which are built with multi-tenancy and pay-per-use models as a key theme.
“In future, this multi-delivery model environment is expected to give rise to IT-as-a-service, where IT budgets would cease to exist at an organisation level and instead become embedded into business units’ budgets,” she added.
She also said that consequently, information-technology departments would shrink and chief information officers were likely to evolve into internal service providers, whose roles revolve around business innovation, rather than technology innovation.
Xu noted that a majority of multinational companies headquartered in Hong Kong foresaw growing demand in most parts of the Asia-Pacific region. Hence they are actively expanding their footprint and shifting their business focus beyond Hong Kong.
As a consequence, besides strengthening the local business, data-centre and cloud-computing service providers are also looking to set up overseas facilities, to tap regional businesses – not only to develop new customers, but also to facilitate their current customers’ expansion pace, she added.
