"But we moved from Hong Kong Island to the New Territories and saved 50 per cent on power costs." Cheng added that regulations and compliance issues dictated much of his data center strategy. "Our data center cost HK$2billion-on the high side," he said, "but our knowledge and expertise costs-both in-house and from suppliers-are much higher than operations."
"China and Singapore are strong competition for skilled resources," said Cheng. "Hong Kong has huge potential-there are positives and challenges to having your data center here."
Michael Thatcher, regional technology officer for Microsoft Singapore said that firms must go through an extensive process in deciding data center location. "You need a criteria list: proximity to customers, legal issues...what are the privacy issues at the locale?", he said.
"TRUST is the issue-if I locate here, I must trust Hong Kong. I need to know that there are laws in place that guarantee integrity of a client's data, and there's an opportunity there for Hong Kong to use transparency to gain advantage."
Container data centers
Thatcher also said that sustainability and a reduced footprint for both land and power has driven his firm to focus on "IT packs": stackable ISO-standard data centers in containers (Microsoft is not the only vendor offering such a product). "It's a game-changer for space-these containerized data centers," he said.
"My boss asks me why Hong Kong business is a small percentage of our overall business," said Gabriel Leung, general manager, EMC HK and Macau. "I think we have good power & infrastructure here, but the last-mile is controlled by property developers."
Leung said that Hong Kong is the "best financial center in this region," but that's not all good news. "There's a problem with local talent-all the clever boys and girls are getting into finance," he said. "People lack innovation-just buy and sell and implement off-the-shelf software. There's not enough R&D and research from universities willing to share research with commercial interests."
"We need a holistic view of building Hong Kong as a regional hub, and cheap land will not create that," said Leung. "The last-mile is the killer."
"In Malaysia and Singapore, everyone is talking about data center location," said Steve McWhirter, SVP, salesforce.com Asia Pacific. "Data centers are getting smaller and smaller by the minute. Demand for data centers continues to escalate-partly driven by the demand for mobile apps."
"There's increasing demand from your customers to 'touch your business'," he said. But the salesforce.com SVP said there were many types of regulation, and conflict between them. "Most customers are outside of Hong Kong, so you need the regulators to buy in," he said. "I deal with the HKMA, the SMA, Bank Negara [Malaysia] and they're all different."
Sign up for CIO Asia eNewsletters.