Why Hong Kong Is an Attractive Destination for Data Centers

Industry News

Frost & Sullivan estimated that the Asia-Pacific data center services market would grow at a compound annual growth rate (CAGR) of 14.7% from 2015-2022 to reach US$31.95 billion at the end of 2022. China, India and Indonesia are the key growth drivers in the Asia-Pacific region, due to their explosive digital needs of emerging economies and huge populations. Moreover, the rising complexities within the IT infrastructure and cost constraints brought by virtualization and consolidation, are encouraging enterprises to use third-party data center services. With the prevalence of edge computing and colocation, many global internet providers are planning to enter the Asia-Pacific market. Hong Kong is one of their top choice of setting up data centers.

Why Hong Kong Is an Attractive Destination for Data Centers

Hong Kong was ranked as the seventh competitive economy for over three consecutive years by The World Economic Forum (WEF). Hong Kong has a strong ICT infrastructure, a stable economy, strong credit facilities and a pool of ICT talents. All of these factors make Hong Kong an attractive destination to build data centers and become a data center hub in Asia-Pacific region.

The Hong Kong data center market is growing. It is expected to be ahead of its closest competitor, Singapore, in another year. 451 Research released an annual report on major data center market in the Asia-Pacific region on February 16, 2018. It mentioned multi-tenant data center market in both Hong Kong and Singapore. It forecasted that Hong Kong’s market will grow at a compound annual growth rate of 4% and reach HK$7.01 billion (US$900 million) revenue in 2021.

Analysts also revealed that demand growth in Hong Kong and Singapore has shifted from financial services, securities and insurance to large cloud and content providers. Being the international gateway to Mainland China and a major financial hub in Asia-Pacific, Hong Kong attracts many cloud service providers to do business there.

The overall security and cyber resilience are also the key factors that make Hong Kong an attractive data center location. The 2018 FM Global Resilience Index ranked 130 countries and territories on their business environment resilience in 12 key areas including political risk, urbanization rate, natural hazard exposure, control of corruption, and inherent cyber risk.

Hong Kong was the best in terms of overall resilience in Asia. Across all risk areas Hong Kong was ranked 19th worldwide, followed by Japan (24th) and Singapore (28th). Switzerland, Luxembourg and Sweden were the top three for overall resilience globally.

Given Hong Kong’s cyber resilience and the development of Greater Bay Area, Hong Kong has a new growth area and an excellent opportunity to promote more diversified economic development. It attracts more foreign companies to use Hong Kong data center services and increases cross-border data flow from Hong Kong.

Dataplugs currently operates four Tier 3+ data centers in Hong Kong. Our physical security, power, cooling and networks in each data centers are at least N+1 redundant, offering you higher uptime and greater reliability. Feel free to contact our sales by phone +852 3959 1888 or email sales@dataplugs.com if you want to learn more about our data centers.