Data Snakes Upwards to the Cloud – Asia Forecast 2013


By Alex Tam, Managing Director, Equinix, Greater China


Photo courtesy of Mitch Altman.

In 2013, the online world will get a little more crowded with 200 million new users getting online for the first time. The ongoing explosion of the Internet population is no longer surprising, but the areas of growth, both geographic and in terms of usage demand, will keep every player on its toes.

As a large number of our new netizens will be emerging from Asia and logging on for the first time via mobile or social channels, demand for enterprise infrastructure and secure, cloud ready, geographic hubs will be a key theme for the year ahead.

Hong Kong is very well positioned to play a key role here as it rapidly evolves into a desired location for cloud service providers. Cloud services, including infrastructure as a service (IaaS) and software as a service (SaaS), experienced the biggest growth and demand in Hong Kong in 2012, which in turn has fuelled data center services expansion. We look at some of the key drivers, which will underline the shifts of 2013.

The cloud will remain hot

The major ongoing disruptive trend to the technology market in 2013 will be more progressive changes in cloud computing. Adoption and deployment of cloud will be happening faster and occurring on a bigger scale. This in turn will drive demand for data centers, especially in the cloud hub of Hong Kong. The city is fast becoming the cloud connect hub for North Asia and China and is well positioned to serve a large number of Chinese enterprises expanding their businesses internationally.

The Hong Kong government has taken actions to drive cloud adoption, investing heavily in the promotion of the region as a highly attractive destination for taking cloud residence. Other locales like Singapore, Australia and Japan are taking similar moves and we may see a year ahead where technology leading countries turning up the heat with ways to encourage and grow cloud activity to turn their markets into a cloud hub, whether through regulatory adjustments, business stimulation incentives or other government based promotional activities.

Mobility drives the path

We are already living through a device-led revolution. According to Gartner, Hong Kong will have 17.421 million mobile subscribers by the end of 2016, representing a penetration rate of 232%.

The deployment of more and more smartphones and devices is driving the growth of applications and in turn this fertile mobile data is boosting network traffic. As many of these apps are open platform we will see an increase in app service providers that will want to set up in more network-neutral environments instead of relying on a single service provider.

The wide adoption of mobile devices not only changes the way people live and work, but also generates huge amounts of information that enterprises need to manage. Data centers will be essential to the effective management of mobile traffic and app ecosystem in 2013.

Socializing the network

Social media impact is all pervasive. It cuts across networks and is breaking through work/life boundaries and while tricky to quantify its impact on data flow is absolutely set to rise. Businesses already recognize that this is not just an after-hours phenomenon, but one that is alive and well in the enterprise across interactions with customers and internal collaborations. It is a trend that is moving very fast and may be one of the big disruptive factors to watch as 2013 could be the year that social media’s data effect will make a bigger impact than ever before on the enterprise and its network demands.

Keeping it safe

Security will still be the toughest concern from the enterprise point of view. Top of mind will be how to house that data and critical applications with much more scalability in preparation for a surge in traffic demand. Cloud providers are precisely placed to address these concerns with embedded security.

In 2012, we saw mid to large-sized organizations taking an evolutionary approach to the cloud that starts with private cloud and hybrid cloud. With that we have seen barriers to entry like security concerns, application fit, and general confidence and understanding about the cloud disappearing and enterprises are asking, how do we adopt the cloud without disrupting benefits. As a result, we have seen cases of some non-mission critical applications moved to public cloud, as production workloads require a low latency link to private infrastructures.

Hunger games – client appetite in 2013

As the central growth trends of social media, mobile, cloud computing and big data continue to shape our industry in 2013, not only will the demand for data center capacity accelerate, but customer demand and requirements will also start to shift.

Flexibility in vendor choices will become essential. Enterprises will demand choice so that they can properly manage technology risk and make informed decisions about which network, cloud and XaaS provider they use for specific purposes. Those that can offer high performance, secure and reliable data center facilities that provide access to a rich ecosystem of companies will be in demand.

Proximity to cloud providers will be on the wish list. As cloud service adoption rises, enterprises will look for direct access to cloud providers and partners in the same locations – IaaS, SaaS and Platform as a Service (PaaS) – in order to reduce security risks and save costs.

Equinix has been working with major cloud providers like Amazon Web Services to offer private and direct connectivity solutions in its Asia facilities.