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HK HCI market in for triple digit growth this year

HK HCI market in for triple digit growth this yearWith its ability to breakdown IT silos and reduce complexity, hyperconverged infrastructure (HCI) is expected to sell like hot cakes in Hong Kong. Technology vendors and market analysts are expecting HCI to have significant impact not only in market size, but also in the modern data center landscape.

The Hong Kong HCI market is expected to reach US$20.8 million, with a triple-digit year-on-year (y-o-y) growth by the end of 2017, said Cynthia Ho (pictured), research director, enterprise server and data center research group at IDC Asia Pacific. She added that this growth is aligned with the Asia Pacific excluding Japan market, which recorded 107% y-o-y growth and reached US$122 million in Q2 2017.

Ho said IDC’s end user survey indicates the growth in HCI is driven by the push to achieve higher utilization rate of hardware resources, shorter application development cycle and improved staff productivity. The urge to develop digital transformation initiatives also encourages Hong Kong businesses to build data centers that are based on “a shared, agile and flexible infrastructure, as compared to the siloed, and dedicated infrastructure of the past,” she said.

Space scarcity and geopolitical drivers

According to technology providers, the hyper growth rate of HCI is driven also by other reasons. “Hong Kong is particularly well suited to HCI due to the scarcity of land,” said Alex Tam, managing director of Equinix Hong Kong. “As a result, we are now seeing HCI going beyond early adoption and becoming mainstream.”

Tam added that many customers have reduced their data center footprint from dozens of cabinets to only two to three cabinets. Geopolitical reasons also contributed to the growth of HCI and data center services, said Calvin Leung, general manager, data center group, Hong Kong, Taiwan, Korea at Lenovo.

“It will be mainly driven by three key market trends: well-connected infrastructure, strategic positioning to Greater China, which will attract more MNCs to set up their offices in Hong Kong, and strong commitment from the government to position Hong Kong as the prime location for data centers within the Asia Pacific region,” he said.

Integration with public cloud

Another reason that more enterprises are turning towards HCI is to bring the public cloud capabilities to their private cloud environment, said Norman Rice, chief marketing, development and product operations officer at Extreme. He said that having storage, compute and connectivity within a single platform is similar to working with public cloud providers.

“At the end it’s utility,” he said. “Enterprises are looking for a simplified but sophisticated approach to engage with rising amount of data. HCI brings the cloud capability within the data center to handle that.”

“The speed of [HCI] uptake also relies on making the integration and management of the hybrid cloud simple and easy-to-use,” said Jeff Smith, senior director of systems engineering, Nutanix.

Smith added that many local businesses have embraced cloud computing, but it also means they are managing a patchwork of cloud systems, consisting of on-premise private cloud and public cloud. These cloud services each have different consumption, licensing and metering models, which can lead to unpredictable IT budgets and expenses.