Enhancing Hong Kong’s Competitiveness Through Data Centre and Cloud Computing –

Trends and Policies

Charles MokLegislative Councillor (Information

Technology)

Cloud services & storageConnected devicesDigital entertainment

Factors driving data center demand

Worldwide spending on cloud services is expected to reach more than $107 billion in 2017

In 4 yearsthe Internet of Things will need

750% more data center capacitythan today

International Data Corporation (IDC)

Largest driver of DC expansion

Long term trends beyond 2015

More demand for…

Server workloadPower demands

Network bandwidthStorage

Data center space: 5.1M sq. ft.

(gross feet area)

1.8M sq. ft. of space planned

Demand for data center services increasing

Occupancy rate remain high

More DC space coming along in HK

• What are the changes in the demand and supply of data center from the trend of cloud computing?

• How is the industry adapting?• What can be done to improve HK’s

attractiveness as an international data center hub and stay competitive?

Key Questions

Mega trends

Big data analysis

FinTech IoT and Smart Cities

Growth in Internet user“Asia’s internet users grew by the equivalent of the entire population of Canada in Q3 of 2014.”- Joe Kava, VP Data Centers, Google

Shortens the traditional life cycles of data centers

DCs need to stay competitive

Increases the need for infrastructure

refresh in older data centers

“About 20 percent of the data centers in the region are more than 8 years old and are not really geared up to handle the demands of modern high density computing platforms,”

- Simon Piff Associate VP of Enterprise

Infrastructure research at IDC Asia Pacific to Datacenter Dynamics

LATEST DATA CENTER DEVELOPMENT IN ASIA

• Singapore: government-led Singapore Data Center Park, pro-biz, green incentives

• Taiwan: a vision to make TW the next APAC Information Operations Center, land policy

• South Korea: government driven huge investment in IT industry, encourage startups

• China: tech firms going global fast, Shenzhen’s initiative in Internet Finance driving DC service demand

• Others: tax incentives

APAC govts race to attract DC investments

Tech Firms looks to Asia

• Google chose Singapore and Taiwan as its data center in Asia, investing US $1bn in total.

• Singapore: $500m on a second, larger, multilevel data center to go online in 2 years

• Taiwan: allocated $600m for Data Center and $66 million to increase capacity

• Amazon will launch data center infrastructure for India in 2016

…What’s for Hong Kong?

HK as key regional data center destination

• Low tax rate• Safest place to build DCs in Asia• Extensive business network• Reliable energy supply• Deep pool of tech talents• Extensive and reliable network connectivity• 17,000 tech and IT companies (2013)• Blooming start-ups• IP protection

- Incentives, e.g. tax breaks, cheap land, facility maintenance services

-Proactive communication and liaison with Tech companies

-Government driven cooperation

Varied approaches in DC facilitation

- Better coordination to strengthen attractiveness

- High quality infrastructure- Space for DC companies to leverage on

economies of scale and expand- More value-added services e.g. IaaS - Support startups and local tech firms to

grow SME demand for DC services and public cloud services

- Green data centers

Hong Kong can enhance its competitiveness to DC

investors

Land supply remains a key issue

• Tseung Kwan O, New Territories New Development Areas (Hung Shui Kiu, NE NT, etc.)

• Conversion of industrial building: hard to meet long term demand

• How much land do we need to increase DC service provision in short to medium term

• Data center land supply policy and planning needed

Existing government support

• Land Supply: Industrial Estates, Greenfield Sites Available for Sale, Land Earmarked for Data Centers

• Data Centre Facilitation Unit and its Thematic Portal (OGCIO)

• Robust telecommunications infrastructure, Pro-Business environment, free flow of information, protection of data privacy, quality ICT professionals

Hong Kong’s core competitiveness

• Attractive as offshore DC for Chinese/int’l companies

• Fair, transparent policies• Operators of IDCs need predictability in policy as

huge investment is involved• Cost and stability of power supply• Coordination to speed up land supply and cut red

tape• Conversion of industrial buildings for co-location

DCs: being adaptive• Enhance cloud computing security for critical

infrastructure

Challenges ahead

• Land supply• Shorter lead time to meet the needs of tech firms,

financial institutions and telecom operators• Staying relevant, advanced planning and better

coordination• Green and environmental initiatives/facilitations• Facilitate partnerships with global players to build

new facilities• Providing attractive incentive packages

Thank You!

charlesmok@charlesmok.hkFacebook: Charles Mok 莫乃光