China’s Huawei to drive cloud services with launch of three data centres in Hong Kong

Huawei’s infrastructure expansion in the city is set to support dozens of cloud services from more than 100 clients, including companies in sectors like finance, media, retail, education, health care and government 

PUBLISHED : Friday, 16 March, 2018, 7:19am
UPDATED : Friday, 16 March, 2018, 8:45am

Huawei Technologies, the world’s largest telecommunications equipment supplier, launched on Thursday three new data centres in Hong Kong, which will serve as the infrastructure for new cloud services geared for the international market.

The Shenzhen-based company said the facilities will support Hong Kong, mainland Chinese and companies from overseas to expand and deliver their cloud services globally.

“With connections to 10 submarine and numerous overland cable systems, Hong Kong is a gateway for Asia-Pacific trade and a regional hub connecting mainland China and global markets,” said Zheng Yelai, the president of Huawei’s cloud business unit.

The company, however, has entered a crowded cloud services market, where competitors include global market leader Amazon Web Services as well as the cloud enterprises of Chinese internet giants Alibaba Group Holding and Tencent Holdings. 

Established in March last year, Huawei Cloud expected to support in Hong Kong dozens of cloud services, including solutions for e-commerce, high-performance computing and artificial intelligence for sectors like finance, media, retail, education, health care and government.

“By bringing our cloud infrastructure, services, support and expertise to Hong Kong, enterprises can stand on Huawei’s shoulders to innovate the future,” said Zheng.

He declined to provide Huawei’s investment in this initiative.

Huawei’s hold on half of world’s telecoms gear gives it a shoo-in seat at the top table of cloud services

Cloud services enable companies to buy, lease or sell software and other digital resources online and on demand, just like electricity from a power grid.

Data centres are secure facilities that house large-capacity servers and data storage systems, equipped with multiple power sources and high-bandwidth internet connections. These are used by enterprises to remotely store large amounts of data, manage their business applications and host cloud computing operations.

Huawei’s infrastructure opening in Hong Kong marked its latest expansion activity for this year, following its foray into the smartphone market in the United States in January.

The privately held technology company’s US expansion was set back by its failure to forge a smartphone distribution alliance with a major American mobile network operator, as US lawmakers lobbied against it because of security concerns. 

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Shifting its attention back to Asia and the more lucrative enterprise field, Huawei has set its sights on taking part in the global cloud services market, which was estimated by Synergy Research to be worth more than US$180 billion last year. 

Research firm IDC has forecast global worldwide spending on public cloud services and infrastructure to reach US$277 billion by 2021.

Hong Kong’s well-developed infrastructure already provides a platform for the cloud businesses of Tencent and Alibaba. For cloud services, computer and storage infrastructure are leased and managed remotely by enterprises on a pay-as-you-go, or consumption, basis.

Tencent, the world’s largest video games company by revenue, has driven its overseas business expansion from the city, where it is supported by data centre providers such as Equinix.

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Alibaba Cloud, the cloud computing arm of e-commerce powerhouse Alibaba, opened its data centre in Hong Kong in 2014 as part of an aggressive international roll-out. New York-listed Alibaba owns the South China Morning Post.

Roben Wang, the vice-president of Huawei Cloud in Southeast Asia, said the company’s new facilities in Hong Kong are involved in tests with more than 100 potential clients, including from mainland China, Malaysia, Singapore and the Philippines.

Several banks and media companies in Hong Kong are also among Huawei Cloud’s targeted clients.

A large part of the Hong Kong market’s growth will ultimately be driven by the major Chinese internet companies
Jabez Tan, Structure Research

Wang said the company was pursuing possible opportunities with the Hong Kong government, which is striving to adopt cloud computing for its various activities.

As the new cloud services player in Hong Kong, Huawei faces stiff competition from some familiar companies that are also its customers in other areas like network and computing equipment.

Jabez Tan, the research director at Toronto-based Structure Research, said “a large part of the Hong Kong market’s growth will ultimately be driven by the major Chinese internet companies – Tencent Holdings, Baidu and Alibaba Group Holding – which are rapidly expanding their businesses around the world”.