1、2023 DATA CENTRE MARKET TRENDSASIAS CONNECTIVITY HUBH O N G K O N G FEATURING SUNeVision HONG KONG MARKET SPOTLIGHTSponsored byTABLE OF CONTENTSEXECUTIVE SUMMARY34-161517GLOBAL DATA CENTRE COLOCATION MARKET SIZE BY REGIONIMPACT OF ARTIFICIAL INTELLIGENCEHYPERSCALE VERTICAL TO DRIVE D

2、ATA CENTRE DEMAND IN HONG KONGHONG KONG:ONE OF ASIAS MOST STRATEGIC CONNECTIVITY HUBSMEGA-i DATA CENTRE:ASIAS#1 CONNECTIVITY HUBNew Hyperscale Data Centres:MEGA Gateway and MEGA IDCNEW CABLE LANDING STATIONS IN HONG KONG:ONE-STOP-SHOP CONNECTIVITYASIA DIRECT CABLE(ADC)LANDS AT HKIS-1SUNeVision CLOUD

3、 EXCHANGE(SCX):VIRTUAL CONNECTIONS TO HYPERSCALE CLOUD PLATFORMSTKO Connect:Dedicated Subsea Cable,Direct End-to-End ConnectivityABOUT SUNeVisionABOUT STRUCTURE RESEARCHCOPYRIGHT STRUCTURE RESEARCH 20232 2023EXECUTIVE SUMMARYThe Hong Kong data centre market is showing signs of a healthy rebound comi

4、ng out of the pandemic period as covid-related travel restrictions and lockdowns ease and the market climbs its way back to its pre-covid levels of business activity.In 2023,this market is projected to be worth USD$2.1 billion and reach$3.2 billion by 2028.The projected fjve-year CAGR for 2023-2028

5、is 9.0%.Like many leading markets around the world,Hong Kong has seen signifjcant demand from hyperscale cloud companies and this trend is expected to continue moving forward.A number of the leading hyperscale platforms are based in the US and geopolitical tensions have showed signs of easing and th

6、is is a bullish sign that will likely influence decision-making for digital infrastructure spend in the year ahead.The primary cause for concern during the pandemic period was that western hyperscale companies would migrate their data centre infrastructure out of Hong Kong and that theory has not pl

7、ayed out practically over the last two years.Instead,hyperscale builds have continued to ramp up and existing deployments have stayed put.This proves that an entire ecosystem of connectivity,traversing key landing points and exchanges,is not going to be easily lifted and shifted and Hong Kong appear

8、s to have retained its long-term strategic importance.Structure Research expects there is still going to be a steady stream of hyperscale-grade demand for colocation capacity as Hong Kong will increasingly be used as a jumping-off point out of China.And we have already started to see this with the t

9、op tier of China-based clouds like Alibaba and Huawei,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 to be a diffjcult market for large hyperscal

10、e cloud companies to build their own data centres in.These hyperscale companies would rely on local data centres that have ability to manage the entire data centre development process from land acquisition,development,colocation leasing and ongoing operations.Data centre infrastructure demand is goi

11、ng to increasingly come from hyperscale companies and this ensures the long-term viability of the market even as the demand profjle starts to transition.Colocation customers require a path to expand and scale their data centre infrastructure deployments over time as internet and cloud adoption acros

12、s the APAC region is projected to accelerate over the next fjve years.Hong Kong has proven to be a relatively challenging market to navigate especially for hyperscalers who do not have local knowledge and expertise.SUNeVisions singular market focus ensures that it is able to develop new data centres

13、 in Hong Kong moving forward given its deep local real estate network,knowledge and development expertise.CONTACT INFORMATIONJabez TanHead of Researchjtstructureresearch.ioCOPYRIGHT STRUCTURE RESEARCH 202332023Source:Structure Research 2023 Global Data Centre Colocation&Interconnection Market Share

14、ReportAsia Pacifjc data centre colocation revenues projected to double from$25.5 billion in 2022 to$51.8 billion by 2028GLOBAL DATA CENTRE COLOCATION MARKET SIZE BY REGION(in US$billions)COPYRIGHT STRUCTURE RESEARCH 202342023Source:Structure Research 2023 Global Data Centre Colocation&Interconnectio

15、n Market Share ReportAsia Pacifjc is projected to become the largest data centre colocation region by 2028,accounting for 38%of the global marketGLOBAL DATA CENTRE COLOCATION MARKET SIZE BY REGIONCOPYRIGHT STRUCTURE RESEARCH 2023(in US dollars)5 2023IMPACT OF ARTIFICIAL INTELLIGENCEArtifjcial intell

16、igence has been on the rise for some time,but suddenly,seemingly out of nowhere,hit a meaningful inflection point.Uptake in AI-based applications has surged and the demand for infrastructure capacity to support these workloads has risen sharply.AI demand has pushed public cloud growth and spawned a

17、new wave of infrastructure service providers specializing in hosting GPU-based infrastructure.AI-oriented startups,enterprises and even hyperscalers are looking for AI-ready infrastructure wherever they can get it and this demand has not surprisingly crossed over into the Internet infrastructure eco

18、system.This new generation of GPU-oriented service providers is taking down colocation capacity to support their operations,hyperscalers are in need of more data centre capacity and support for higher densities,while some end users are moving their own infrastructure into colocation environments.Som

19、e are even running on-premise,but connecting back to any and all of these infrastructure locations.Like the cloud,AI does not live in the sky,but in a data centre,and the capacity requirements and inevitable growth are coming at a pace orders of magnitude higher than previously seen.But while hypers

20、cale cloud may precede it,the AI story promises to be vastly different.The impact of AI will be far-reaching.It is going to prime demand for data centre colocation and force operators to fundamentally rethink how they approach design,ramping timelines,capacity planning,operations,supply chains,procu

21、rement and even business development.Needless to say,the rise of AI is a net positive for the sector and set to create levels of demand that will kick off another wave of data centre development,eventually on a global basis.It is important to keep in mind that AI is almost purely value-add for the s

22、ector with few hints of cannibalization effects.AI is enhancing raw public cloud infrastructure with tools and services and creating a new generation of workloads that enhance,augment and expand,rather than replace,what has already been built.COPYRIGHT STRUCTURE RESEARCH 20236 2023Decentralization o

23、f hyperscale demand:Hyperscale clouds started off centralizing their footprints and deployments in a select group of core global hubs.Singapore and Hong Kong are prime examples of this initial strategy given their position as connectivity hubs with plenty of submarine cables concentrated in those ma

24、rkets.Internet infrastructure will continue to shift to a more distributed and decentralized model.More submarine cables will be constructed to connect emerging markets to core markets.This will eventually lead to a shift in data centre builds and deployments to more localized and in-country archite

25、ctures.Chinese hyperscale companies are projected to command a growing share of data centre demand in Hong Kong.US-based hyperscale cloud companies like AWS,Microsoft Azure,Google Cloud and IBM Cloud have already established meaningful data centre footprints in Hong Kong.Oracle Cloud has yet to esta

26、blish a sizable presence and is projected to increase its presence in the near future.Alibaba,Tencent,Huawei,ByteDance,Kingsoft Cloud and JD Cloud are examples of China-based hyperscale companies that are projected to expand internationally.Hong Kong will be the one of the fjrst international market

27、s to benefjt from the upcoming wave of international expansions coming from a sizeable group of tier 2 and tier 3 cloud,content and digital media and e-commerce companies that include Baidu,JD.com,Kingsoft Cloud,ByteDance,Bilibili and Pinduoduo.HYPERSCALE COMPANIESHYPERSCALE VERTICAL TO DRIVE DATA C

28、ENTRE DEMAND IN HONG KONGCOPYRIGHT STRUCTURE RESEARCH 202372023Hong Kong:One of Asias Most Strategic Connectivity HubsHong Kong is an aggregation hub for internet traffjc in the APAC region and its concentration of connected submarine cables landing here still makes it a preferred location to both h

29、yperscale and enterprise companies.Geographically central location in the APAC region,resulting in lower connectivity costs and latency.Hong Kong is strategically important as the intersection point of international submarine cable systems and the domestic terrestrial cable backbone connecting into

30、China,serving as a gateway of data traffjc between China and international ports.Hong Kong serves as both a gateway into China,as well as a springboard for Chinese companies looking to access international markets.A meaningful number of enterprises,hyperscalers,international and regional telcos stil

31、l use Hong Kong as a gateway to access the mainland China markets.Aggregation point for 16 international submarine communication cablesLANTAU ISLANDKOWLOONHONG KONG ISLANDNEW TERRITORIESCOPYRIGHT STRUCTURE RESEARCH 2023TONG FUKAsia-America Gateway(AAG)Cable SystemAPCN-2FLAG Europe-Asia(FEA)FLAG Nort

32、h Asia Loop/REACH North Asia LoopTSEUNG KWAN OAsia Pacifjc Gateway(APG)Asia Submarine-cable Express(ASE)EAC-C2C*Upcoming(Under Development)CAPE DAGUILARAsia Africa Europe-1(AAE-1)CHUNG HOM KOKAsia Direct Cable(ADC)EAC-C2CHainan to Hong Kong Express(H2HE)SEA-H2X*Southeast Asia Japan Cable(SJC)Southea

33、st Asia-Japan Cable 2(SJC2)*DEEP WATER BAYSeaMeWe-3Tata TGN-Intra Asia(TGN-IA)8 2023MEGA-i Data Centre:Asias#1 Connectivity HubWith Hong Kong being one of the most strategic connectivity hubs in the APAC region,where does this connectivity ecosystem reside within the Hong Kong market itself?Data cen

34、tres that act as aggregation hubs for network,cloud and IT service providers are categorized as“carrier hotels”to distinguish them from other data centres that dont have the same level of connectivity and peering options.There are only two data centres in Hong Kong that Structure Research classifjes

35、 as carrier hotels-and SUNeVisions MEGA-i data centre is the#1 ranked most interconnected data centre in the world*.*Source:https:/ DATA CENTRE CONNECTIVITY ECOSYSTEMSTRUCTURE RESEARCH ANALYST TAKE:MEGA-is IMPACTEnterprises and IT service providers deploy their data centre and connectivity infrastru

36、cture in Hong Kong because of its gateway status to serve other markets across the APAC region.SUNeVisions MEGA-i Data Centre serves as an anchor for them to deploy their connectivity centric infrastructure to both contribute to the existing ecosystem while also being able to access a wide variety o

37、f networks and cloud service provider platforms that congregate within its data centres.COPYRIGHT STRUCTURE RESEARCH 20239 2023Despite being a single market data centre provider,SUNeVision is ranked as a top 15 provider in global physical cross connect market share with over 15,000 cross connects,fu

38、rther underscoring the densely interconnected ecosystems that are deployed within its data centre portfolio in Hong Kong and specifjcally in the MEGA-i carrier hotel.10 out of 12 major submarine cable points of presence(PoPs)are located within its highly connected,carrier and cloud-neutral data cent

39、res.This translates to a wide variety of connectivity options for cross regional data transfer and business expansion.SR Ecosystem Score:2,379SR Ecosystem Rank:#1In-building Cloud On-Ramps:7SDN Fabrics,IXs:11?Alibaba Cloud Express Connec?AWS Direct Connec?Azure ExpressRout?Google Cloud Interconnect?

40、HUAWEI CLOUD Direct Connec?IBM Cloud Direct Lin?Tencent Cloud Direct Connect?SUNeVision Cloud eXchange(SCX?HKI?Console Connec?Megapor?MegaI?Epsilon Infjny?DC Connec?BBI?NetI?KIN?iAIXSTRUCTURE RESEARCH ANALYST TAKE:GLOBAL CONNECTIVITY2022 GLOBAL INTERCONNECTION MARKET SHARE-PHYSICAL CROSS CONNECTSSUN

41、eVision MEGA-iSource:Structure Research Global Colocation&Interconnection Market Share Report 2023MEGA-i Data Centre:Asias#1 Connectivity HubCOPYRIGHT STRUCTURE RESEARCH 202310 2023New Hyperscale Data Centres:MEGA Gateway and MEGA IDCMEGA Gateway is the latest addition to SUNeVision MEGA Campus,a hi

42、ghly connected data centre ecosystem.It is the seventh data centre on SUNeVisions portfolio,complementing MEGA-is world-leading position in connectivity.MEGA Gateway is built to support mission-critical IT workloads with exceptional connectivity,high power density and future-proof infrastructure.Loc

43、ated in Tsuen Wan,the centre of Hong Kong,it is well positioned as a strategic springboard connecting customers to mainland China from the rest of the world.Colocation customers require a path to expand and scale their data centre infrastructure deployments over time as internet and cloud adoption a

44、cross the APAC region is projected to accelerate over the next fjve years.With the data centre market in Singapore experiencing supply constraints,the countrys allocation of limited capacity for data centre use has placed Hong Kong in a favourable position to cater to the data centre capacity growth

45、 and expansion requirements of hyperscale and enterprise companies.Hong Kong has yet to show a desire to regulate data centre development which bodes well for the future growth potential of this key data centre hub.Hong Kong has proven to be a relatively challenging market to navigate especially for

46、 hyperscalers who do not have local knowledge and expertise.SUNeVisions singular market focus ensures that it is able to develop new data centres in Hong Kong moving forward given its deep local real estate network,knowledge and development expertise.STRUCTURE RESEARCH ANALYST TAKE:DATA CENTRES FOR

47、SUSTAINABLE GROWTH COPYRIGHT STRUCTURE RESEARCH 2023112023MEGA IDC,SUNeVisions upcoming state-of-the-art data centre in Tseung Kwan O,will see the completion of its Phase One(approximately 500,000 square feet GFA and 50MW IT load)by the early 2024.Being the largest hyperscale data centre in Hong Kon

48、g measured by power capacity,MEGA IDC is built to house the most demanding servers and is well positioned to capture the wave of AI demand.NEW CABLE LANDING STATIONS IN HONG KONG:ONE-STOP-SHOP CONNECTIVITYHong Kong is a regional hub for subsea cables because of its proximity to China.It is the inter

49、section point of international submarine cable system and domestic land cable backbone in mainland China.The southern district of Hong Kong is a popular location for cable landing,however the available site in that area is limited.Seabed corridor availability is also occupied by existing cables and

50、different risk zones.SUNeVision is the fjrst and only data centre provider with carrier-neutral cable landing stations in Hong Kong.In March 2022,SUNeVision announced the company has won the tender for a site in Chung Hom Kok,Hong Kong(RBL1219).This site wil be used to develop its second landing sta

51、tion for international submarine cables,following its fjrst landing station,HKIS-1,launched in 2021.The addition of cable landing stations to its data centre portfolio will further strengthen SUNeVisions position as the leading connectivity hub in Asia.Building on this rich ecosystem,the addition of

52、 the cable landing stations will provide a one-stop-solution to cable owners and users alike.SUNeVisions carrier-neutral facilities would be the ideal location for partners who look for connectivity to multiple cables systems and providers.The two neighbouring sites will offer path diversity and exp

53、ansion capacities for upcoming new submarine cable growth.SUNEVISION ONE-STOP-SHOP CONNECTIVITY SERVICECOPYRIGHT STRUCTURE RESEARCH 202312 2023ASIA DIRECT CABLE(ADC)LANDS AT HKIS-1The ADC has landed its Hong Kong segment at SUNeVisions HKIS-1,with a new City Point-of-Presence(PoP)at MEGA Plus.This w

54、ill enable substantially more connectivity between Hong Kong and other countriesSUNeVisions HKIS-1 differentiates itself as the only carrier-neutral cable landing station in Hong Kong to provide true connectivity advantages to all peering partnersThe landing of ADC will bring new connections and boo

55、st connectivity within SUNeVision MEGA Campus;with Telcos and ISP expanding presence at SUNeVision to cater for the increasing connectivity and traffjcADC is the fjrst international cable to land in Hong Kong since 2017ADC will be Asias highest-capacity intra-Asia submarine cable and will bring subs

56、tantially more connectivity between Hong Kong and other countriesOne of several cables to land in Hong Kong over the next few years and reaffjrms Hong Kong remains as an international data hubCOPYRIGHT STRUCTURE RESEARCH 2023132023SUNeVision CLOUD EXCHANGE(SCX):VIRTUAL CONNECTIONS TO HYPERSCALE CLOU

57、D PLATFORMSTraditionally connectivity hubs were characterized by the number of telecom carriers or networks that connect into a given data centre facility.While it is still the case that network connectivity remains an important trait,increasingly data centres are more so evaluated by the number of

58、cloud connectivity options.This is measured by the number of cloud on-ramps deployed within a data centre and the ability to securely and directly connect into multiple public cloud,SaaS and content platforms.Most cloud on-ramps are available on SUNeVision MEGA Campus.With strong cloud connectivity,

59、SUNeVision not only provides both direct cloud connect with security and low latency,it also offers pay-as-you-go virtual connections via SUNeVision Cloud eXchange(SCX).Carrier hotels that already have a densely connected ecosystem of networks are natural magnets to attract cloud on-ramp and connect

60、ivity node deployments from public cloud,SaaS and content platforms.MEGA-is established base of networks has translated into it being a data centre that hosts all major cloud gateways that include AWS Direct Connect and Microsoft Azure ExpressRoute.Launched in 2020,the SUNeVision Cloud eXchange(SCX)

61、,a cloud exchange platform developed by SUNeVision,directly connects customers to multiple cloud service providers(CSPs)through Virtual cross-connects(VxC)to meet the increasing demand for multi-cloud connectivity.With SCX,customers can now dynamically scale bandwidth and establish direct connectivi

62、ty to their desired CSPs.SCX also provides direct access to other multi-cloud exchanges to effectively support customers multi-cloud strategiesSTRUCTURE RESEARCH ANALYST TAKE:REGIONAL CLOUD HUBCOPYRIGHT STRUCTURE RESEARCH 2023142023TKO Connect:Dedicated Subsea Cable Direct End-to-End ConnectivityTKO

63、 Connect is a purpose-built and dedicated undersea cable system directly linking MEGA-i,the most critical subsea interconnection hub in Chai Wan,and MEGA Plus,the state-of-the-art hyperscale data centre in Tseung Kwan O.It further expands to MEGA IDC,the leading hyperscale data centre in Tseung Kwan

64、 O,establishing multiple connectivity hubs within MEGA Campus.Spanning approximately 3km between MEGA-i and MEGA Plus,it provides the most direct and shortest route between the two precincts,20+km shorter and 4 times faster than alternate land routes*,delivering exceptional connectivity and resilien

65、cy with ultra-low latency.Interconnecting with major international subsea city PoPs,cloud gateways and hundreds of global and local IT service providers,TKO Connect caters demands for high-capacity,high-performance and high-speed connectivity as well as low-latency communication service.COPYRIGHT ST

66、RUCTURE RESEARCH 202315 2023Cable Diversity:Two separate physical cables underwater provide full resilienceRobust Ecosystem:Direct access to highly connected ecosystem of telco,cloud,ISP,global enterprisesDirect Connection:Purpose-built subsea cable between MEGA-i and MEGA Plus/MEGA IDC for more dir

67、ect and secure connectionCost Effectiveness:End-to-end connection with cross-connects at both endsShorter Path:Shorter path via subsea route with ultra-low latencyHigh Reliability:Minimised risks of failure and interruption with direct end-to-end design*Land routes leveraging Fixed Telecommunication

68、s Network Services(FTNS)providers networkAbout SUNeVisionSUNeVision(SEHK:1686),the technology arm of Sun Hung Kai Properties(SEHK:0016),is the largest data centre provider in Hong Kong.We provide industry-leading carrier and cloud-neutral data centre services with Asias number one connectivity.We co

69、nnect providers of telecommunications,cloud,ISP,CDN,OTT from local,mainland China and global with enterprises of different businesses on our Asia leading data centre ecosystem.SUNeVision forms MEGA Campus by extending the connectivity edge from highly connected MEGA-i to other high-tier data centres

70、,including MEGA Gateway,MEGA IDC,MEGA Plus and MEGA Two.Facilities on MEGA Campus are interconnected through a dedicated dark fjbre network and around 15,000 cross-connects.Together with City PoPs of major submarine cables in our facilities,we enable our customers for direct connections to multi-clo

71、ud platforms and multi-cloud exchanges with the best connectivity in town.The addition of cable landing stations HKIS-1 and HKIS-2 to our data centre portfolio will provide a one-stop-solution to cable owners and users,strengthening our position as the leading connectivity hub in Asia.We are committ

72、ed to supporting Hong Kong as a regional information hub and a strategic gateway to mainland China.For more information,please visit:COPYRIGHT STRUCTURE RESEARCH 202316 2023About Structure ResearchStructure Research is an independent research and consulting fjrm with a special focus on the Internet

73、infrastructure market.We are devoted to understanding,tracking and projecting the future of infrastructure service providers around the world and the hyperscale value chain in particular.Our mission is to publish the best research and analysis,and supply the most comprehensive data sets,about the In

74、ternet infrastructure services market.We provide the information and perspective necessary to make accurate strategic decisions.Structure Research works with service providers,vendors,institutional investors and IT users as a research and advisory partner.Our subscription-based revenue model includes regular tracking,analysis,company,trend and topic reports,fjnancial models and proprietary databases containing market analytics and consulting services.For more information about our services,please visit us at:COPYRIGHT STRUCTURE RESEARCH 202317 2023SPONSORED BY