Amazon’s cloud business to launch in HK as competition with Chinese rivals heats up

26-Apr-2019 Intellasia | South China Morning Post | 6:00 AM Print This Post

Amazon Web Services (AWS), the world’s largest cloud services provider, has launched data centres and cloud infrastructure in Hong Kong as it looks to ramp up the services it provides to users in the Asia-Pacific.

The expansion allows AWS’ customers in the city to access data stored in the cloud with lower latency, meaning companies can more efficiently run applications critical to their business thanks to a much faster transfer of data following an instruction.

Hong Kong, the eighth market in the Asia-Pacific for AWS, will have three locations of data centre clusters. Previously, local customers using AWS cloud services had to store their data in other locations, such as Singapore or Tokyo.

The launch of AWS in Hong Kong comes as competition heats up in the region, with rivals Alibaba Cloud and Tencent Cloud opening operations in the city in 2014 and 2017 respectively.

According to a Gartner report released on Wednesday, Alibaba Cloud was the market leader in Asia-Pacific for services such as infrastructure-as-a-service (IAAS) as well as infrastructure utility services (IUS) in 2018. Alibaba Cloud commands nearly 20 per cent of the market, compared to 11 per cent for AWS and Microsoft’s 8 per cent.

Alibaba Cloud, a subsidiary of e-commerce giant Alibaba Group Holding, is currently the world’s third largest cloud services provider, with a 4.9 per cent global market share, behind AWS and Microsoft, according to research firm Gartner. The Chinese company also has the largest cloud market share in China. New York-listed Alibaba is the parent company of the South China Morning Post.

“It’s an opportune moment to launch in Hong Kong,” said Werner Vogels, chief technology officer of, in an interview. “It’s crucial for businesses that want to migrate into the cloud for lower latency access… it will help them to build and innovate a whole new range of applications that were impossible before.”

The latency for Hong Kong businesses using AWS’ infrastructure in the city, as opposed to storing data in Tokyo or Singapore, could be reduced from 100 milliseconds to 10 milliseconds, said Vogels. This would make an important difference for time or mission-critical applications where too much latency could cost businesses millions.

“It’s an order of magnitude improvement,” Vogels said.

Cloud computing enables companies to buy, sell, lease or distribute over the internet a range of software and other digital resources as an on-demand service, just like electricity from a power grid. These resources are managed inside data centres.

Having data centres in Hong Kong will also allow customers with data residency requirements to store their data within the city, AWS said. The US company already serves local enterprises, such as Cathay Pacific, HSBC and New World Development. It also counts Hong Kong start-ups, such as Grana, AfterShip, Lalamove and WeLend, among its customers.

On top of services such as data storage, AWS offers applications such as machine learning models, blockchain networks, and even a service that allows customers to develop, test and deploy intelligent robotics applications.

On the Chinese mainland, AWS has partnerships with Sinnet and NWCD to provide cloud infrastructure in Beijing and Ningxia respectively. Last month, The Wall Street Journal reported that China was considering a “liberalisation pilot” in one of its free trade zones that would allow foreign cloud computing providers to operate without a local partner.

Currently, foreign companies like AWS and Microsoft are required to work with local partners to provide cloud services that comply with Chinese law.

With companies of all sizes around the world moving to the cloud instead of maintaining their own infrastructure, the playing field for adopting such technology is increasingly being levelled.

“In the past only the richest companies had the best IT infrastructure but this is no longer the case [with applications in the cloud],” Vogels said.

The “biggest competitive driver” will be the data that companies have and how they use that data to help their businesses succeed, he said.

The advent of 5G mobile networks, which are expected to be rolled out commercially in 2020 and promise speeds 100 times faster than current 4G networks as well as the ability to support thousands of connections simultaneously, will also give companies the ability to connect every device to the internet and send data to the cloud with no constraints.

“What is possible [with 5G] is unlimited… you just have to use your imagination,” said Vogels.


Category: Hong Kong

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