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In HK, service providers on 'cloud' nine, but firms firm on terra firma

By Oswald Chan | China Daily | Updated: 2016-12-13 08:13

Hong Kong is playing catch-up to embrace cloud computing.

More and more providers of services are pushing for cloud solutions.

But, most Hong Kong businesses and firms are not enthusiastic about adopting the technology.

Alibaba Cloud, the mainland e-commerce giant Alibaba Group's cloud computing business arm, is stepping up the pace of its international expansion with the deployment of its own data centers around the world to serve its 2.3 million customers from startups to large corporations. Hong Kong is one of the business hubs for that expansion.

The cloud services provider opened two data centers in Hong Kong in November 2015 and May 2014 to provide a spectrum of 100 cloud computing products and services, including data storage, analytics services, artificial intelligence, internet middleware and cloud security.

Alibaba Cloud is also reaching out to partners at the Hong Kong Science Park, Cocoon and PaperClip to provide cloud computing services to facilitate local innovation and entrepreneurship.

"We have seen an increasing number of enterprises interested in switching from traditional information technology to cloud computing," Alibaba Cloud's Hong Kong and Macao general manager Leo Liu told China Daily. "Given its proximity to the Chinese mainland and high demand fpr information exchange between the two markets, we see great potential in the Hong Kong market."

The majority of Hong Kong enterprises, however, are still lukewarm about leveraging cloud technology. A survey in January by Gartner, a global technology research and advisory company, revealed that chief information officers in Hong Kong ranked cloud computing as a low priority compared with their peers in India, Southeast Asia and Australia.

Liu agreed that the real threat to developing a cloud computing industry in Hong Kong is how to change the rigid mentality of local businesses. "We believe that our real competition is how to further change the traditional information technology mindset to embrace the new data technology."

Hong Kong has the ingredients to become a cloud computing center if the rigid business mentality can be shaken up. Hong Kong's business-friendly environment, free flow of information, developed telecommunication infrastructure, and a thriving startup community are the factors supporting the growth of the industry.

In the Cloud Readiness Index 2016 survey by the Asia Cloud Computing Association, Hong Kong jumped four spots from the previous report in 2015 to become the top destination in cloud readiness among 14 Asia Pacific countries this year.

According to the survey, Hong Kong's drastic improvements in data privacy protection propelled the city to the first rank. The city also made significant improvements in international connectivity and data center risk management.

The future of cloud computing in Hong Kong is certainly a bright one as investments in cloud computing are tipped to balloon.

According to Gartner, total information technology spending in Hong Kong in 2017, including data center systems investment, will soar to HK$175 billion ($22.5 billion), a 2.2 percent increase from 2016.

The worldwide public cloud services market is projected to grow to $204 billion in 2016, the technology advisory firm added.

After the data centers in Hong Kong, Alibaba Cloud will also open another four data centers in the United Arab Emirates, Germany, Australia and Japan by the end of this year, boosting the total number of Alibaba Cloud's total data centers to 14.

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