1. Market Research
  2. > ICT
  3. > Data Center Market Trends
Hong Kong Data Center Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Hong Kong Data Center Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

  • November 2021
  • 140 pages
  • ID: 6187432
  • Format: PDF
  • Mordor Intelligence LLP

Summary

Table of Contents

Search Inside

The Hong Kong data center market was valued at USD 1.94 billion in 2020, and it is expected to reach USD 4.12 billion by 2026, registering a CAGR of approximately 12.58% from 2021 to 2026 (forecast period). Hong Kong is one of the critical data center locations in the Asia-Pacific region due to the low tax rates and electricity costs, rich network capability, and suitable climate conditions. These factors are mainly attracting investments from across the world to support the growth of data centers in the country. For instance, in July 2020, China Mobile acquired an industrial site in Fo Tan for data center development for HKD 5.6 billion. The accommodation value of HKD 5,967 per sq ft is the highest on record for an industrial site.

Key Highlights
Nearly all the central cloud and hosting service providers globally have established a presence in Hong Kong. According to Datacenters.com, there are presently 22 service providers and 43 data centers in Hong Kong. This comprises 42 colocation facilities, 29 cloud nodes, 13 Internet exchanges (IX), and ten disaster recovery and business continuity (DRBC) sites.
Hong Kong is a principal financial and international trading and logistics hub and is home to several regional offices and headquarters of global corporations. This generates a strong demand for secure data center facilities and services. Its proximity to China’s Mainland is also a core strength, thus stressing the need for data centers in the region.
In particular, hyper-scale and international digital media content and public cloud service providers such as Amazon Web Services (AWS), Facebook, Google, and Alibaba Cloud have been fundamental in pushing demand for data center services, significantly enhancing their uptake of data center capacity in Asia and particularly in Hong Kong over the past few years, by building massive-scale platforms.
In July 2021, The Hong Kong-based telecom services provider PCCW agreed to sell its data center business to a New York-listed infrastructure REIT DigitalBridge Group for USD 750 million in a bid to focus on its main telecom business. PCCW operates facilities at nine data center locations in Hong Kong, Mainland China, and Malaysia. However, DigitalBridge only acquired the Powerbase HK (Hong Kong) and DC Malaysia (Malaysia) subsidiaries from PCCW.
The government of Hong Kong is adopting a multi-pronged approach in facilitating the development and application of the 5G network and plans to launch 5G services very soon. The low latency rate of 5G technology would likely drive the demand for cloud storage, real-time data accessing and streaming. Data centers would likely not only expand but also need upgrades amid this network transformation.
However, with the onset of the COVID-19 pandemic, different supply chains across many industries are affected, including data center infrastructure. All significant components of a data center are built off-site, delivered, and then installed, indicating vulnerable breakage points for the market’s supply chain.
Despite the ongoing COVID-19 outbreak and geopolitical uncertainties, the Hong Kong data center market activity has remained stable. In one of the most significant leasing transactions this year, the US-based data center, REIT Digital Realty, announced in July 2020 that it agreed to lease a newly established high computational data center at 11 Kin Chueng Street in Kwai Chung, the vendor’s second data center facility.

Key Market Trends

Increasing Demand for Cloud Computing is Boosting the Data Center Market Growth

The growth of cloud computing, the development of the Internet of Things (IoT), and the growth of data consumption from emerging industries like fintech, digital media, and e-commerce have become the catalyst for the increasing demand for colocation (or offsite third-party) data centers in Hong Kong.
According to the 2020 Cloud Readiness Index by the ’Asia Cloud Computing Association’ (ACCA), Hong Kong has reemerged as the most cloud-ready state in the APAC region, claiming the top spot from Singapore. This new development in Hong Kong would strengthen Digital Realty’s presence within the Asia Pacific region, where the company currently operates a network of industry-leading data centers located in Tokyo, Singapore, Sydney Osaka, Hong Kong, and Melbourne.
According to a report by Nutanix Inc. 2020, while public cloud investment will remain relatively flat over the coming year, planned investment in the private cloud is predicted to nearly double, while traditional datacentres look set to plummet 37.5% over the same period. Over the next few years, Hong Kong respondents plan to triple their hybrid cloud investment, from 13% to 38%, as 70% of those surveyed locally agree or fully agree that the hybrid cloud is the perfect cloud model for their IT environment.

Telecom and IT Sector Holds a Major Share of the Market

IT service providers such as Fujitsu and IBM frequently rent wholesale data center space from specialist data center providers as they strengthen their data center footsteps into a smaller number of newer, larger, and more effective data centers. Rather than paying for expensive refurbishments, they are closing down more minor, less efficient non-strategic data centers and improving their services. Local Hong Kong telecom firms are also fortifying their data center footprint. For instance, according to Hutchison Telecommunications forecast, there would be around 3.32 million HT mobile subscribers by 2020.
With Long Term Evolution (LTE) accelerated expansion and a slowdown in 2G and 3G services, the Hong Kong telecom market grows fast. For instance, according to GSMA, in 2019, around 74% of all mobile internet connections in Hong Kong used 4G technology. However, encompassing mobile connectivity, cloud services, IoT, and smartphones has become essential for telecom businesses. Operators across the value chain are forced to adjust to these emerging market changes to maintain revenue and profit.
With the adoption of artificial intelligence, IoT, and big data analytics, the need for high-performance computing infrastructure grows. The requirement for supercomputers is also increasing with the increase in investment towards cryptocurrency mining. Furthermore, the growing development of Hong Kong facilities and a high-speed 5G network implementation in 2020 will encourage the data center network market.

Competitive Landscape

The Hong Kong data center market is moderately competitive, with significant players adopting strategies like product and service innovation and mergers & acquisitions. The market consists of several major players. Some of the major players in the market are China Mobile Limited, Cyxtera Technologies Inc., Global Switch Limited, SUNeVision Holdings Ltd, Digital Realty Trust, Inc., among others. The growing adoption of IT infrastructure is a principal driver in the data center market in Hong Kong, with the high adoption of servers, storage, and networking infrastructure.

January 2021 - HGC Global Communications Limited (HGC), a full-fledged fixed-line operator and ICT service provider with extensive local and international network coverage, services, and infrastructure, announced the availability of its hyperscale-focused fiber-optic network at AirTrunk’s latest hyperscale data center in Hong Kong.
April 2020 - SUNeVision Holdings added a new Microsoft Azure ExpressRoute site in Hong Kong (HK) to give customers in the city and throughout Asia enhanced resilience and performance. This new site leverages the robust connectivity on MEGA Campus and HK’s position as a regional information hub. With the launch of the new site, enterprises can now connect to Azure in MEGA-i through an onsite point of presence (PoP) or telecommunications partners, managed service providers (MSPs), or cloud exchange platforms already available MEGA Campus.

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 150+ Million searchable statistics with tables, figures & datasets
  • More than 25,000 trusted sources
  • Single User License — provides access to the report by one individual.
  • Department License — allows you to share the report with up to 5 users
  • Site License — allows the report to be shared amongst all employees in a defined country
  • Corporate License — allows for complete access, globally.

ReportLinker may already be registered as a supplier with your company. If you want to Order by PO, check with us first and we'll let you know if we are a registered supplier and what the vendor number is. Otherwise, we'll provide you with the necessary information to register ReportLinker as a vendor.

Ahmad helps you find the right report:
Testimonials

The research specialist advised us on the best content for our needs and provided a great report and follow-up, thanks very much we shall look at ReportLinker in the future.

Kate Merrick

Global Marketing Manager at
Eurotherm by Schneider Electric

We were impressed with the support that ReportLinker’s research specialists’ team provided. The report we purchased was useful and provided exactly what we want.

Category Manager at
Ikea

ReportLinker gave access to reliable and useful data while avoiding dispersing resources and spending too much time on unnecessary research.

Executive Director at
PwC Advisory

The customer service was fast, responsive, and 100% professional in all my dealings (...) If we have more research needs, I'll certainly prioritize working with ReportLinker!

Scott Griffith

Vice President Marketing at
Maurice Sporting Goods

The research specialist provided prompt, helpful instructions for accessing ReportLinker's product. He also followed up to make sure everything went smoothly and to ensure an easy transition to the next stage of my research

Jessica P Huffman

Research Associate at
American Transportation Research Institute

Excellent customer service. Very responsive and fast.

Director, Corporate Strategy at
Ingredion

I reached out to ReportLinker for a detailed market study on the Air Treatment industry. The quality of the report, the research specialist’s willingness to solve my queries exceeded my expectations. I would definitely recommend ReportLinker for in-depth industry information.

Mariana Mendoza

Global Platform Senior Manager at
Whirlpool Corporation

Thanks! I like what you've provided and will certainly come back if I need to do further research works.

Bee Hin Png

CEO at
LDR Pte Ltd

The research specialist advised us on the best content for our needs and provided a great report and follow-up, thanks very much we shall look at ReportLinker in the future.

Kate Merrick

Global Marketing Manager at
Eurotherm by Schneider Electric

FAQ
  • How we can help
    • I am not sure if the report I am interested in will fulfill my needs. Can you help me?
    • Yes, of course. You can call us at +33(0) 4 37 65 17 03 or drop us an email at [email protected] to let us know more about your requirements.
    • We buy reports often - can ReportLinker get me any benefits?
    • Yes. Set up a call with a Senior Research Advisor to learn more - [email protected] or +33(0) 4 37 65 17 03.
    • I have had negative experiences with market research reports before. How can you avoid this from happening again?
    • We advise all clients to read the TOC and Summary and list your questions so that we can get more insight for you before you make any purchase decision. A research advisor will accompany you so that you can compare samples and reports from different sources, and choose the study that is right for you.

  • Report Delivery
    • How and when I will receive my Report?
    • Most reports are delivered right away in a pdf format, while others are accessed via a secure link and access codes. Do note that sometimes reports are sent within a 12 hour period, depending on the time zones. However, you can contact us to escalate this. Should you need a hard copy, you can check if this option is offered for the particular report, and pay the related fees.
  • Payment conditions
    • What payment methods do you accept?
      1. Credit card : VISA, American Express, Mastercard, or
      2. You can download an invoice to pay by wire transfer, check, or via a Purchase Order from your company, or
      3. You can pay via a Check made out in US Dollars, Euros, or British Pounds for the full amount made payable to ReportLinker
    • What are ReportLinker’s Payment Terms?
    • All payments must normally be submitted within 30 days. However, you can let us know if you need extended time.
    • Are Taxes and duties included?
    • All companies based in France must pay a 20% tax per report. The same applies to all individuals based in the EU. All EU companies must supply their VAT number when purchasing to avoid this charge.
    • I’m not satisfied. Can I be refunded?
    • No. Once your order has been processed and the publisher has received a notification to send you the report, we cannot issue any refund or cancel any order. As these are not ‘traditional’ products that can be returned, reports that are dispatched are considered to be ‘consumed’.
  • User license
    • The license that you should acquire depends on the number of persons that need to access the report. This can range from Single User (only one person will have the right to read or access the report), or Department License (up to 5 persons), to Site License (a group of persons based in the same company location), or Corporate License (the entire company personnel based worldwide). However, as publishers have different terms and conditions, we can look into this for you.
Purchase Reports From Reputable Market Research Publishers

ref:plp2021

Reportlinker.com © Copyright 2022. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.

Make sure you don’t miss any news and follow us on