Why Hong Kong is playing “cloud catch up” – but moving quickly

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It may be strange to hear, but Hong Kong has fallen behind much of the rest of the world when it comes to adopting cloud computing.

Hong Kong is well known for being an enormous financial hub for south-east Asia and one of the busiest centres of economic activity in the world, so to think that they’re lacking on the technological front would seem out of character. And yet, that’s exactly the case.

In many ways, Hong Kong is playing a version of “cloud catch up” with the rest of the world, with reports and surveys showing that there’s a general reluctance among businesses to make the cloud part of their operations. Despite this, there are other factors within Hong Kong that are pushing more cloud solutions, to the point where we may only be a few years away from Hong Kong truly catching up with what others are doing.

The hesitation shown by businesses in Hong Kong is actually reminiscent of the worries many business leaders expressed about the cloud several years ago. While not necessarily a new technology, the cloud was quickly gaining steam, and organisations wanted to know if it was the right fit for them. The usual issues were brought up, most of them pertaining to security.

Once businesses became more familiar with the cloud, and once cloud providers addressed the worries, adoption skyrocketed, to the point where it’s hard to imagine doing business without cloud computing at all. Businesses in Hong Kong are facing the same challenges. Many of the top executives indicate they are worried about cloud security, while others say it’s more a question about the legal restrictions dealing with the cloud.

Other factors also play a role in the lack of cloud adoption, factors that aren’t as prevalent in other areas of the world. As mentioned above, the finance industry in Hong Kong is especially large and influential. But by its very nature, financial institutions don’t like taking on risk. For many years, the cloud was seen as a risky manoeuvre, so many financial companies chose to stay away from it. That same thinking still holds sway in Hong Kong, though that is changing by degrees. Hong Kong CIOs have also expressed less interest in cloud. A recent survey from Gartner shows that CIOs rank cloud computing as a low priority, especially when compared to nearby regions like India, Southeast Asia, and Australia. Again, overcoming these obstacles requires a change in mindset, one that is certainly happening, though it lags behind other parts of the globe.

Another reason for poor cloud adoption is the lack of availability of cloud services. Amazon Web Services (AWS) is the leading public cloud provider in the world, but for the longest time it hadn’t spread to Hong Kong. AWS now considers Hong Kong to be what is referred to as an “edge location”, which is a definite improvement, but more work needs to be done. Luckily, it appears that provider proliferation is happening in the area. Public cloud providers like Amazon are turning their attention to the international market, with major in-roads being made in India, China, and Southeast Asia. Microsoft has partnered up with Hong Kong tech companies to provide the cloud version of its Office software. Google Cloud Platform is making strategic moves in the area as well. That’s not to mention Alibaba’s recent opening of its first data centre in Hong Kong.

It’s clear that cloud providers see the value of moving into Hong Kong and are implementing plans that will see it grow over the next few years. This is aided by legal reforms and the cooperation of Hong Kong companies.

The future of cloud computing in Hong Kong is certainly a bright one. According to research from IDC, the amount of money spent on cloud services in Hong Kong is expected to reach nearly $700 million by 2017. Companies see the opportunity and their getting on board with the idea. In a few years, it may even seem strange that we ever thought of Hong Kong being so far behind in the cloud. Whatever happens, it’s almost a sure thing that the cloud will prosper in the region, and with it, the companies that take advantage of the solutions it provides.

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