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Data centers as policy instruments

Stefan Hammond (Computerworld HK) | May 18, 2011
Hong Kong has a unique business structure. No other place has such a mix of public and private sector initiatives—government working with private interests to supply services to the public.

No governance-system is perfect, but Hong Kong is consistently rated the "world's freest economy" by US think-tanks. We have low tax rates and a "laissez-faire" free enterprise structure. It works.

Over the last decade, the HKSAR has emphasized its 'hub' capacity: logistics, shipping, financial services...all are accorded "hub" status. This forces another would-be "hub' to present a united front. Tax breaks, other government initiatives, the rule of law, and support from the private sector all contribute to Singapore's strong profile as a data center attractor.

So how does Hong Kong compete?

A spirited forum coordinated by Samson Tam Legislator (IT), HKSAR, and the Hong Kong Computer Society, was held late last month to address that issue.

Tam began the proceedings by saying he was pleased to see the HKSAR government finish the report and move forward. "Hong Kong as a data center hub for region will add value," he said, "but how can we transform ourselves into a data center hub-how to execute? Government and stakeholders everywhere must contribute."

The cost of land

HKCS President, Stephen Lau, said that in recent years: "Past [HKCS] President Sunny Lee was instrumental in driving this initiative, along with the previous GCIO." Lau said he wanted to seek the interest and views of the attendees. "We know one problem is the cost of land, and the government is working hard on this," said Lau. "But even if we solve that issue, how do we differentiate ourselves?"

Michael Mudd, regional representative for The Open Computing Alliance, said that the data center hub initiative that followed the publication of the paper was important. "The opportunity in China is vast," he said

Mudd pointed out some metrics in Hong Kong's favor: "Connectivity here is half the price of Singapore, and one-fourth that of Singapore." But he pointed out that Malaysia's early start with their "Multimedia Super Corridor" initiative is now a "US$2billion business, estimated to rise to $5b by 2019." As for Singapore, "their stock exchange operates huge underground data centers near Jurong Bird Park"-a scheme that bypasses land costs.

Mudd mentioned that other areas are increasing efficiency in data centers: "solar arrays at one data center in the US state of Oregon supply 80 per cent of its electricity." He also brought up a critical yet seldom-mentioned motivator for solar: "Data centers typically require redundant power-supplies as well as backup generators. But regulations for fuel-storage in populated areas may mean time-limitations for those generators." 

Power costs

Raymond Cheng, chief technology and services officer, Hong Kong at HSBC, said his bank has a big data center here. "The cost of power is one major factor," said Cheng.


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