Over-capacity and easing demand sees consolidation while other regional bases move to expand

Hong Kong, suffering from slowing demand and over-capacity, is in danger of being marginalised in an expanding Asian Internet data centre market that is expected to be worth US$3.3 billion by 2005, up from US$713 million last year.

'There are massive opportunities for both existing Internet data centre operators and new entrants across Asia, but operators in Hong Kong need to pursue aggressive growth strategies to help them keep pace with other players in the region,' International Data Corp (IDC) senior analyst for channels and alliances, David Yew, said.

The mainland Internet data centre market was expected to show an annual grow rate of 84 per cent between 2000 and 2005, as India grew 56 per cent and Indonesia 45 per cent.

Operators in Australia, Singapore and South Korea were also expected to generate significant business during that period.

By comparison, Hong Kong's data centre market, could expect to grow about 27 per cent a year over the same period of time, as operators faced further consolidation and a maturing market, where financial services providers, such as banks, were the main customers.

'For the Asia-Pacific, excluding Japan, companies in the communications, banking and finance, and manufacturing sectors are driving the Internet data centre market, which will grow at 36 per cent a year from 2000 to 2005,' Mr Yew said.