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INFORMATION TECHNOLOGY | Contributed Content, Hong Kong
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Alex Tam

2016: The advent of the Interconnected Era

BY ALEX TAM

If we look back at how technology has impacted business development in 2015, we will see that trends like big data, cloud computing, and Internet of Things (IoT) have gradually become the new enterprise norms. Now, not only CIOs, but leaders across all business functions are re-inventing their IT strategies to capitalise on emerging technology.

We have seen some significant changes and emerging challenges in the management of technology within organisations – be it solely inside IT departments or across the entire business, that are set to impact the market in 2016.

1. Embracing cloud will continue to be a top enterprise priority
Last year, we saw an increasing number of cloud service providers (CSPs) providing more comprehensive cloud services to local and regional customers in light of strong demands from all types of enterprises.

Aliyun, the cloud computing arm of China’s ecommerce giant Alibaba, is a good example of this trend in action. In the last year it has expanded the availability of its cloud platform, enabling multinational, Chinese, and North American enterprises to gain secure access to the full suite of its cloud services.

The next big question for cloud service providers will be how they can drive user utilisation of the cloud; making sure they have the expertise to tackle issues like configuration, systems integration, and round-the-clock cloud application management.

2. Multi-cloud environment to win new ground among enterprises, particularly finance
We also saw a growing number of businesses in the Financial Services and Insurance Industries (FSI) embracing cloud in 2015. As security concerns over cloud are fading, FSI companies are looking to improve agility and cost-efficiency by adopting cloud solutions.

However, due to the levels of regulation present in the industry, many of them are taking a hybrid-cloud approach that enables them to manage sensitive and critical data in private environments whilst using public cloud to run basic and internal applications.

Global companies are also facing challenges when it comes to deploying cloud across multiple locations for multiple functions and different use cases. This has left many having to manage multiple cloud vendors to gain greater flexibility over the services they use.

The multi-cloud environment is set to become the new norm in 2016 as businesses seek to pick up the ‘best-fit’ applications from different cloud vendors. This leaves CIOs with a challenging task – integrating multiple clouds into a single platform to reduce complexity and achieve interoperability between systems.

As a result, many businesses are looking for ways to directly access to multiple clouds, bypassing public cloud where security, performance, and traceability are at stake.

3. Evolution of content streaming will drive demand for data center services
The rise of online streaming media, led by services like Netflix and LeTV, has shuffled the entire business model of content providers and had a knock-on effect on the technology used to support them.

With Netflix relying purely on public cloud and its entry into Hong Kong this year, we expect to see more media companies change their delivery approach, sparking increased demand for cloud and data center services in light of the staggering amount of internet traffic behind the scenes.

Content companies need robust interconnections with various partners such as content delivery networks, Telco carriers, and content service providers across several markets to optimise application performance and deliver content seamlessly, regardless of users’ location or device.

4. Mobile payment market will increase demands for financial ecosystems
Hong Kong has long been accused of lagging behind when it comes to mobile payment, particularly in comparison to mainland China. However, during the last 12 months, we have seen new types of online-to-offline payment platforms – such as Kiss and P2P mobile payment services – rolling out and pushing the boundaries between traditional banking and new technology.

The mobile payment market is only set to grow more in 2016, as companies realise the huge business opportunities that can be leveraged via smartphones and devices. Meanwhile, the performance, security, and complex compliance challenges that surround these types of payments will propel companies to partner with IT service providers to ensure they can respond to customer demands without jeopardising overall performance.

A successful mobile payment service involves multiple segments of data transmission, configuration, and delivery from banks, to payment processors, and finally to end-users. By having direct interconnectivity between all of these services in a single financial ecosystem, companies can have real-time access to brokers, as well as digital wallet and market data providers.

Organisations need to be able to connect to hundreds of point-of-sale providers, digital commerce sites, financial institutions, and mobile networks via private connections that bypass the public internet and eliminate uncertainties about performance and security.

Looking forward, the mobile payment market in Hong Kong is poised to become more mature, unlocking the true value of digital transactions for customers and businesses alike.

5. New players in Hong Kong will increase data center competitiveness
This is less of a prediction but ongoing expectation that there will be new comers in the data center space this year. In particular, mainland Chinese technology companies, such as Alibaba and Xiaomi, are setting up their own data centers in new territories to support their global expansions.

Hong Kong is often the first location that Chinese companies will look at when expanding thanks to our IT infrastructure, friendly investment environment, and international business connections.

With newcomers flocking into this space, data center providers will need to invest in add-value solutions besides providing space and power in colocation services. And I can only foresee those who have superior interconnectivity across industries and a broad international footprint being able to win customers’ favor, as businesses focus on digitisation and going global!

The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Hongkong Business. The author was not remunerated for this article.

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Alex Tam

Alex Tam

Alex Tam is Managing Director at Equinix Hong Kong. He has over 20 years’ experience in the ICT industry. Tam holds a M.Sc. degree in Global Business from The Chinese University of Hong Kong, and a B.Sc. degree in Engineering from The University of Hong Kong.

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