Report by Structure Research
The Hong Kong data centre market continues to push forward and displays a steady and consistent personality. In 2021, this market is projected to be worth USD $1.4 billion and projected to reach $2.5 billion in 2026. The projected five-year CAGR for 2021-2026 is 11%.
Like many leading markets around the world, Hong Kong has taken a significant turn to the hyperscale side of the game. This is now a majority wholesale colocation market and things will continue to shift in that direction going forward.
The composition of the market, however, is slated to change over time as the political environment emerging in Hong Kong – driven by the new security law – begins to have an impact. A number of the leading hyperscale platforms are based in the US and geopolitical tensions are inevitably going to influence decision-making, particularly around sensitive areas like data sovereignty and privacy. Nothing out of the ordinary is about to happen today. Hyperscale builds will continue and existing deployments are staying put. An entire ecosystem of connectivity, traversing key landing points and exchanges, is not going to be easily lifted and shifted and Hong Kong will retain its long-term strategic importance.
Against this backdrop, hyperscalers based in the US will start to de-risk and decentralize into other parts of the region. In fact, this is something that was already well underway as Internet-based technology adoption accelerates across the region – now being supercharged by the sea changes brought on by the pandemic. But there is still going to be a steady stream of hyperscale-grade demand for colocation capacity. Hong Kong will increasingly be used as a jumping off point out of China rather than the other way around. And we have already started to see this with the top tier of China-based clouds like Alibaba and Tencent, followed by the leading Chinese telcos. A second tier of public cloud, content and social media platforms, is set to expand outside of China and Hong Kong will be the logical springboard.
Hong Kong remains a land constrained market, with unique strategic importance, that is also difficult to self-build in. Data centre infrastructure is difficult to procure at the hyperscale level and this ensures the long-term viability of the market even as the demand profile starts to transition.
This report takes an in-depth look at the Hong Kong colocation and interconnection market. We track the market’s size and rate of growth, while drilling into the inventory situation and demand profile. A complete picture of demand, supply and absorption is provided, along with detailed mapping of cloud infrastructure and interconnection nodes across the market. New and planned builds are tracked and accounted for so that the current and maximum built out capacity is measured.
This report is an excellent resource for any operator, investor or end user (service provider or enterprise) that is looking to understand and project the data centre market in Hong Kong or find a service provider.
Total 65 pages.