Hong Kong’s ‘cloud’ services market heats up with Tencent expansion

Chinese internet giant Tencent Holdings is expected to heat up the market for so-called cloud computing services in Hong Kong, following the launch of its own operation that targets the city’s large community of small and medium-sized enterprises.

Tencent Cloud, the fast-growing cloud services unit of Shenzhen-based Tencent, kicked off its expansion in Hong Kong last week by collaborating with the Hong Kong Science and Technology Parks Corporation to provide vital online infrastructure requirements for the start-ups under its incubation programmes.

“There should be plenty of business to go around in the local market as Hong Kong is home to a growing start-up sector,” Philbert Shih, the founder and managing director of international consulting firm Structure Research, told the South China Morning Post.

This development has made Hong Kong a strategic new battleground for the cloud businesses of rivals Tencent and e-commerce powerhouse Alibaba Group Holding, which has rapidly increased its presence in this specific market segment since last year through its Alibaba Cloud unit.

Alibaba Group is the publisher of The South China Morning Post.

Cloud computing enables companies to buy, sell, lease or distribute over the internet a range of software and other digital resources as an on-demand service, just like electricity from a power grid. These resources are managed inside data centres. “Cloud” refers to the internet as depicted in computer network diagrams.