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Get on the Cloud

Cloud Computing Symposium from Cyberport  

Experts discuss the latest developments in cloud computing in Hong Kong and the Chinese mainland at a symposium at Cyberport last month

Cyberport, Hong Kong's creative digital community, and the Hong Kong Government, organised a one-day symposium last month to discuss efforts in the public and private sectors to develop cloud computing in Hong Kong and the Chinese mainland. More than 650 members from government, business and academia attended the "Next Generation Information Technology Standard Symposium," held 30 March, at Cyberport.

"Cloud computing will be the prevailing trend in the market in the years to come, and will be one of the key drivers for the economic development of the region with great potential not only in the local market, but also the huge mainland market," said Herman Lam, CEO, Cyberport.

Hong Kong is a regional leader in the sector, placing second in cloud-computing readiness in Asia Pacific, according to an index published last year by the Asia Cloud Computing Association. Hong Kong's ranking, according to Daniel Lai, Government Chief Information Officer, signals the city's "readiness and eagerness to embrace this new computing paradigm that is changing the way enterprises, big and small, leverage IT resources to support business-critical applications."  

Several leading international companies, including Google, NTT Communications and Pacnet, are in the process or have recently set up data centres in Hong Kong. According to the Data Centre Risk Index published by consulting firms Cushman & Wakefield and hurleypalmerflatt last June, Hong Kong holds the least risk in Asia for setting up data centres, and ranks fourth among 20 economies surveyed.

Standardising the System

  Hong Kong Harbour
  Hong Kong is a regional
leader in the sector, placing second in the Cloud Readiness Index 2011
The mainland has also been actively developing its cloud computing market, which is tipped to rise nearly Rmb94.9 billion this year, from Rmb73.4 billion in 2011, according to a recent report by APAC Insight. Cloud computing figures prominently in the mainland's 12th Five-Year Programme. Authorities plan to invest Rmb1.1 trillion to develop key cloud computing hubs on the mainland, according to KPMG Hong Kong. In addition to the five cloud hubs already set up in Beijing, Shanghai, Shenzhen, Hangzhou and Wuxi as part of a pilot scheme, about 20 more are planned, according to a recent report by Rorrester Research.

Efforts are also underway on the mainland to come up with a standardised system for cloud computing, according to Fu Yongbao, Vice Consultant, Department of Software Service Industry, Ministry of Industry and Information Technology. Mr Fu said that a working group, which helped develop worldwide ICT standards for business and consumer applications, is now developing a unified standard for the country.

At the forefront of the mainland's cloud-computing sector is the city of Shanghai, where Cloud Valley – a cloud computing cluster made up of more than 100 companies – was set up last year in the Knowledge and Innovation Community (KIC), the city's technology park built by Hong Kong businessman Vincent Lo.

Customised Solutions

Cyberport, which set up an office in the KIC last year, has, to date, helped five Hong Kong ICT SMEs set up on the mainland, including Leovation Ltd, a multimedia company, which set up an office in Shanghai.

"Cloud computing allows users to share information and data, and gives users the ability to process them from supercomputers," said Yang Ling, General Manager of Shanghai Cloud Valley Development.


Cyberport, Hong Kong’s creative digital community, is leading efforts to advance cloud computing in Hong Kong

Cloud Valley plans to build an SME service market, providing such cloud services as office automation, hardware, SaaS Call centre, and HR services. Ms Yang said such services would help SMEs to reduce operational costs and allow them to concentrate on their core business.

"There is little marginal cost in cloud computing because the service can be used many times, thanks to the large number of SMEs with the same cloud services needs, whether to do client-relations management or enterprise resource planning," Ms Yang said. "We can also provide customised solutions to different companies. It's the same idea as the iPad – all iPads look the same, but the applications inside are set differently. Companies can choose what types of services they want."

Cloud computing enables companies, especially ICT-related SMEs, to quickly realise their commercial potential in the market, according to Xu Yiling, Director of Cooperation and Development, Shanghai Promotion Centre of Software Industry. He pointed out that businesses such as online gaming companies, are among those that stand to benefit from using cloud.

"A new online game, for instance, may attract 10,000 gamers in the first week, and 50,000 the second week. That number would only continue to multiply. If we use the traditional way to allocate servers (resources) in different places, it is very difficult to do so especially in sizeable countries such as China. A new start-up is not capable of allocating servers in various cities in China in one or two weeks. But with cloud, they could handle it literally within two or three minutes," he said. 

Virtual Service

  Fu Yongbao, Department of Software Service Industry, Ministry of Industry and Information
  Fu Yongbao, Vice Consultant, Department of Software Service Industry, Ministry of Industry and Information Technology, says experts are working on coming up with a standardised format for cloud computing on the Chinese mainland
Hurdles to developing cloud computing in Asia primarily stem from multiple regulatory regimes, confusion about what cloud is, concerns over security, privacy and integration, according to Per Dahlberg, CEO of the Asia Cloud Computing Association, which released the Cloud Readiness Index 2011. He advised SMEs to learn more about cloud computing before venturing into it.

"You get a warranty if you buy a piece of software. But buying a service is slightly different. There has to be a certain trust built in the service provider, which might not even be there, it's all virtualised," Mr Dahlberg said.

He suggested that SMEs first do their homework by asking themselves, "what does it mean for my business? How would the support work? If I am an SME, what is my checklist if I have to move data onto the cloud? What is the price model and does that price model work for me? It's a learning process," he said.

"No one should move their data all at once to the cloud. There is a misconception that it's all or nothing and that's not how it is. You can move step by step."


Mr Dahlberg said Hong Kong could become an ICT hub in Asia with its world-class broadband penetration, international connectivity and good policy governance. Hong Kong, though, he said faces tough competition in the region. Japan, which topped the cloud-readiness index, has a mature market with an established set of regulations and conditions, while third-ranked South Korea aims to capture 10 per cent of the global cloud market by 2014 and achieve a 50 percent reduction of IT infrastructure by 2015.

"Hong Kong can be a beacon in the region. We would encourage the Hong Kong Government to have dialogue with other authorities. Japan is very good at setting standards, Singapore is open to setting standards. By having dialogue, we don't create high walls, and data can easily move from here to there."

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