Sky’s the limit for cloud computing in Hong Kong as China looms large, says tech consulting arm of France’s Orange

Spending on public cloud services in the Asia-Pacific tipped to hit US$12.9 billion by 2019, up from an estimated US$7.3 billion this year

PUBLISHED : Wednesday, 30 December, 2015, 12:48pm
UPDATED : Wednesday, 30 December, 2015, 12:55pm

Orange Business Services, the technology consulting arm of French multinational communications firm Orange, predicts a robust cloud computing market in Hong Kong as more mainland Chinese companies expand their business overseas.

“Hong Kong is the springboard for many Chinese companies going international, and we believe that our activity here is critical to supporting their expansion plans,” said Helmut Reisinger, the executive vice-president for international operations at Orange Business Services.

The company recently extended the delivery of its Flexible Computing Advanced cloud service for large multinational corporate customers in Hong Kong, where it has set up a new data centre operation.

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

According to Orange, its Flexible Computing Advanced represents a cloud offering known in the industry as infrastructure-as-a-service (IaaS).

Research firm Gartner has defined IaaS as “a standardised, highly automated offering, where computer resources - complemented by storage and networking capabilities - are owned and hosted by a service provider and offered to customers on-demand over the internet”.

That means users of the new Orange cloud offering can set up a virtual data centre without the high cost of building their own physical infrastructure.

Users can operate and customise their computing requirements through a Web-based graphical user interface, which serves as a management console for the overall environment.

“Orange chose to launch Flexible Computing Advanced in Hong Kong as the city serves as the regional hub for thousands of multinationals around the Pearl River Delta. We believe it will help meet the growing demand for IaaS,” said Derrick Loi, the senior director responsible for Orange’s cloud business in the Asia-Pacific.

Gartner has forecast spending for so-called public cloud services in the Asia-Pacific to reach US$12.9 billion by 2019, up from an estimated US$7.3 billion this year.

IaaS is expected to make up 8.3 per cent of that projected regional expenditure in 2019.

“Key factors driving cloud [adoption] include organisational agility, cost benefits, increased innovation with the potential for transformation, and elements of user self-service and control,” Gartner senior research analyst Fred Ng said.

“Speed of deployment is also a primary driver of cloud usage, potentially capable of reducing setup time from days/weeks to days/hours.”

Although Hong Kong companies were blasted for being slow to adopt cloud computing services two years ago, things are changing quickly. A Hong Kong industry survey commissioned by Australian telecommunications giant Telstra published in March found that 39 per cent of Hong Kong corporate respondents have adopted IaaS, with 44 per cent planning to do so in the near future.

Reisinger pointed out that Hong Kong serves as “an excellent location for data centres services” because of its proximity to the Chinese mainland, a conducive business environment, a stable government, a transparent and independent legal system, free flow of information, reliable power supply, sound telecommunications infrastructure and low risk of natural disasters.

He said Orange’s network coverage includes about 220 countries and territories, which assures Chinese enterprises expanding overseas of broad support.

Haier, the global home appliances giant based in China’s eastern coastal city of Qingdao in Shandong province, represent one of the biggest cloud deals landed by Orange.

The initial deployment of that three-year Flexible Computing programme linked Haier’s mainland headquarters with its after-sales service centre in India over a cloud-based platform.

“Over the next 50 years, we expect globalisation to be driven out of Asia,” Reisinger said, adding that China’s big internet companies are already stepping up their international expansion.

That opportunity has not been lost on e-commerce powerhouse Alibaba Group, which is pushing aggressively to expand its cloud-computing business worldwide through a strategic alliance with Equinix, the world’s largest data-centre services provider.

READ MORE: China’s Alibaba targets data centres in bid to replace Amazon as cloud computing king by 2018

Equinix signed an agreement in June with Alibaba Cloud Computing , the subsidiary of Alibaba formerly known as Aliyun, to provide secure and direct access to its cloud platform for companies in both Hong Kong and Silicon Valley in California.

“Alibaba’s extensive partner ecosystem ... aims at both the Chinese and global [cloud] markets,” Forrester Research analyst Charlie Dai said.