Goodbye Google data center in Hong Kong

Summary:Hong Kong just ain't attractive enough a data center hub for Google, as it changes its mind and favors expanding plans in Taiwan and Singapore instead apparently due to costs.

So Google has spiked its plan for a data center in Hong Kong , citing the reason that it's hard to acquire a large plot of land here in Hong Kong.

While there's now an official statement from them, there was already speculation in the local media a couple months back, when it was pointed out that the 2.7 hectare plot of land they had acquired for the data center in 2011 was still sitting idle, obviously not adhering to the initial plan of having the data center ready this year.

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So were they expecting to acquire another large plot of land, like the 15 hectares they have in Changhua County, Taiwan, after announcing its initial data center plans for Hong Kong back in 2011? It would seem incredibly unrealistic of the company to expect to tag on a larger chunk of land at a later date, especially in a place like Hong Kong where land for commercial use is obviously in short supply, and I doubt they would have made a risky decision like that.

It certainly doesn't appear to be a decision made due to the cost of the land. A rough estimate of the land premiums (from the Hong Kong and Science Technology Parks website) for a site the size of Google's in Tseung Kwan O Industrial Estate points to a figure somewhere between US$1 to US$2 million — pocket change for a company the size of Google. Admittedly, other costs like electrical power and salaries that figure into the running cost of a data center have gone up, but certainly not so much to put off a planned data center build.

Naturally, despite their statement that they remain committed to Hong Kong, this has led to speculation on the company’s plans for Hong Kong, which is ultimately a "Special Administrative Region" of the People's Republic of China, the country that they pulled their search engine out of.

Cancelling the Hong Kong data center build certainly doesn't appear to be a big deal to the company, as it can still serve its customers through its data centers in Taiwan and Singapore, but it must be a huge disappointment to say the least, to the government here which has been trying to promote Hong Kong as a data center hub. And making it harder to swallow must be that Google has one in Singapore — the other rival data center hub in the region. 

I certainly don't think this is the start of any trend for data center operators to up and move elsewhere, for Hong Kong still offers a host of benefits attractive to data center operators, such as a lack of natural disasters like earthquakes, a reliable power supply and is well connected through subsea cables. Well, at least not until there is more clarity about Shanghai's free trade zone and how it plans to handle Internet traffic there.

And here's a blast from the past from the groundbreaking ceremony Google held here in 2011:

Topics: Data Centers, Hong Kong

About

Currently based in Hong Kong, Roland has covered the business and tech industry as a tech scribe at The Business Times in Singapore, as an industry analyst at IDC, and also ran communications in a regional telco. He still lives and breathes tech in his day job leading digital marketing in the Asia Pacific region at Juniper Networks.

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