Jabez Tan on Hong Kong Data Centre Market; Gateway to China

• February 1, 2016

Source: Data Center Knowledge

Hong Kong may be one of the world’s tiniest nations, but its importance on the internet’s global map is huge, and, if the Hong Kong government plays its cards right, that importance is only going to grow.

Hong Kong is important because China is important. As China’s Special Administrative Region, it is more westernized and open than the People’s Republic. It is both a springboard and a gateway between the recently emerged economic powerhouse and the rest of the world.

“Springboard” and “gateway” are “the two words that encapsulate the China effect” on Hong Kong and Singapore, the other Asia Pacific business and interconnection hub that’s enjoying a similar status, Jabez Tan, senior analyst at Structure Research, a data center market research firm, says.

The Hong Kong data center market is a springboard in the sense that international service providers that want to serve China often start in Hong Kong, which doesn’t have requirements like China’s Internet Data Center License, uncertainty about data privacy, or anything like the Great Firewall of China. “Companies understand the risk of going directly to China,” Tan says.

It’s a gateway in the sense that digital business flows through it both ways: international companies use it to get into China, and Chinese companies, from search engine and cloud giants to online gaming and mobile app developers, set up shop in Hong Kong before they branch out into Southeast Asia, Europe, or North America. Tencent followed this path, and so did Alibaba, to name some of the biggest examples.