Microsoft to speed up 'cloud' adoption in Hong Kong

Cloud computing is enjoying strong growth in Hong Kong, with Microsoft seeing widespread adoption of its online version of Office

PUBLISHED : Thursday, 12 December, 2013, 11:21am
UPDATED : Friday, 13 December, 2013, 4:17am

Microsoft, the world’s largest software company, expects the momentum for cloud-computing adoption in Hong Kong to stay strong over the next 12 months after its own operation achieved red-hot growth this year.

“We’re hopeful that [adoption] will accelerate next year,” Horace Chow Chok-kee, the general manager at Microsoft Hong Kong, told the South China Morning Post. “We have a strong pipeline to support that.”

Chow cited as an example Office 365, the cloud-computing version of Microsoft’s popular Office productivity software, which has sold more than 700,000 user “seats” in Hong Kong since the subscription-based online service was launched in June 2011.

“Most of that number – about 60 to 70 per cent – was generated over the past 11 months,” he said. “We’ve experienced triple-digit growth quarter after quarter from this application on the cloud, as more firms experience the cost savings on technology infrastructure.”

Cloud computing enables consumers and companies to buy, lease, sell or distribute a range of software, business systems, data and other digital resources as an on-demand service online, just like electricity from a power grid. These resources are kept and managed inside data centres. “Cloud” refers to the internet.

Office 365, Dynamics CRM, the Bing search engine and Xbox Live are examples of Microsoft-built applications which run on the “public cloud”.

Third-party partners are very important for us to accelerate [cloud computing] penetration
Horace Chow, Microsoft HK general manager

Windows Azure, which was established in February 2010, is a cloud-computing platform on which enterprises, large or small, can develop, deploy and manage their internal applications through a global network of Microsoft-managed data centres. This cloud infrastructure supports both Microsoft and third-party applications that enterprises use.

Versatile set-ups

Microsoft also supports companies which prefer to have their own server computer on premise to run specific internal applications, while also subscribing to a public cloud service that hosts their additional applications, files or databases. This “hybrid cloud” set-up is configured for inter-operability.

Technology research firm IDC forecast total spending on cloud services in Hong Kong to reach US$685 million (HK$5.31 billion) by 2017 from an estimated US$251 million this year.

Chow said Microsoft will also sharpen its focus on increasing the cloud adoption of small- and medium-sized enterprises (SMEs), which government estimates put at 308,761 as of June this year and account for about 98 per cent of total businesses across Hong Kong.

“We have grown the number of seats sold to SMEs at an average of about 180 per cent a month over the past six to nine months,” he said. “Third-party partners are very important for us to accelerate penetration in the SME market next year.”

In an internal survey conducted by Microsoft in October on 2,017 cloud partners in 11 markets, the company found that 74 per cent of decision-makers inside SMEs had higher misconception about cloud computing than those in larger enterprises.

Silver lining

But the survey, which included 70 cloud partners in Hong Kong, also found that 70 per cent of respondents expected their cloud-related businesses to grow up to 30 per cent over the next 12 months.

Microsoft’s third-party cloud partners in the city have swelled to about 950 from 100 three years ago.

A major cloud deployment is being undertaken by Andrew Ling, the director of information technology at Esquel Group, one of the world’s leading producers of cotton shirts. Ling said Esquel will move all of its 7,250 corporate e-mail users to the Office 365 platform.

Office 365 is currently Microsoft’s fastest-growing commercial product worldwide, with a revenue of about US$1.5 billion a year.

Chris Morris, associate vice-president for Asia-Pacific cloud services research at IDC, said: “Use of the Azure platform in Hong Kong is growing strongly, with many partners … joining the Azure ecosystem and expanding the range of available services.”

Sun Hung Kai Properties has adopted Azure to host its own cloud applications. Richard Lam, the firm’s head of information technology, said that set-up has helped cut by 70 per cent the number of servers used by the property developer.

Up to 50 of Microsoft’s cloud partners provide custom-developed business solutions which run on the Azure, including human resources, customer relationship management and financial applications.