Seven in 10 Hong Kong Businesses Plan to Expand in New Markets in the Next 12 Months

A strong demand for IT infrastructure or system upgrade to capitalize on 5G

Jul 6, 2022

Hong Kong – July 7, 2022 – Businesses around the world are planning major investments in digital technologies to support ambitious expansion plans following lessons learned from the pandemic. New findings from an annual survey of technology decision-makers, by Equinix, Inc. (Nasdaq: EQIX), reveal that Hong Kong businesses remain bullish about their future global expansion plans despite the negative impacts of the pandemic over the past two years.

Of the 2,900 IT decision-makers surveyed globally in the Equinix 2022 Global Tech Trends Survey, 71% of Hong Kong respondents indicated their organization is planning to expand in the next 12 months. More than half of Hong Kong IT leaders (54%) planned to increase their investments in 5G technology, and 64% believed that IT infrastructures and systems require upgrading in order to fully capitalize on this new technology.

According to Jeremy Deutsch, President, Equinix Asia-Pacific, “We are thrilled to see business leaders in Asia-Pacific prepare for international expansion and show more determination to speed up their pace for digitization, despite current financial concerns and operational constraints from global supply chains. Equinix is dedicated to helping our customers and partners seize every business opportunity through our global platform and interconnected digital ecosystem, especially under the post-pandemic landscape as businesses continue to navigate their digital transformation journeys to thrive in today's digital world.”

Today, 5G coverage in Hong Kong has already exceeded 90% of the population.¹ For Hong Kong business leaders to fully grasp new market opportunities, 5G will become a critical foundation to support their digital-first strategies. The survey revealed that nearly half of IT leaders (43%) in Hong Kong believed the most significant impact of having a strong 5G network was to enable their organization to take advantage of new technologies, such as Artificial Intelligence (AI) and the internet of things (IoT).

The survey also revealed that the pandemic continues to impact businesses’ digital strategies significantly. Nearly half (44%) of the IT leaders in Hong Kong said they are accelerating their company’s digital evolution because of COVID-19. Indeed, 53% confirmed their IT budgets have increased as a direct outcome of its legacy—an insight into the now broadly acknowledged necessity for robust digital infrastructure to pivot to evolving business needs in an instant, and 92% said they intend to remain or increase investment in interconnection services as they plan to progress digital transformation and build resilience. Furthermore, the majority of respondents in Hong Kong (60%) believe the technology changes and investments implemented during the pandemic are here to stay, and 55% pointed out that they are further along in their digital transformation journey as a result of COVID-19.

There remain, however, significant concerns around cybersecurity as a key threat to business success. Ensuring expansion plans are supported by resilient digital models is business-critical, particularly at a time of increasing volatility and emerging global threats. As part of their strategies, 81% of respondents in Hong Kong confirmed a key priority is improving cybersecurity. 76% said cutting costs is critical, while 72% highlighted the need to comply with data protection regulations and improve customer experience. Furthermore, given the public discourse around security and data protection, the top-of-mind threats for IT leaders in Hong Kong were security breaches and data leaks (62%) and cyber attacks (61%).

There were also several potentially limiting factors identified by businesses when it came to global growth, with supply chain challenges highlighted as a particular area of concern. In Hong Kong, 57% of respondents said their business was afflicted by global supply chain issues and shortages, while 49% specified the global microchip shortage as a threat to their business. These ongoing supply chain issues appear to be driving a need for more virtualization, with growth aspirations underpinned by significant planned investment in digital infrastructure.

Rick Villars, Group Vice President for Worldwide Research at IDC noted: “Even as enterprises seek to navigate the waves of disruptions associated with inflation, supply chain disruptions, and unmet skills needs that arose in the first half of 2022, IDC consistently hears from IT leaders that timely and expansive access to innovative technology, interconnectivity, and intelligent SaaS resources is critical. Companies like Equinix, that can speed access to needed facilities and connectivity options while also enabling more effective use of hybrid and multicloud services, will play a vital role in helping IT teams make sustainable technology investment decisions and take full advantage of SaaS and digital infrastructure.”

In addition, the survey revealed in Hong Kong:

Cloud migration continues: 72% of IT leaders said they plan to move more business functions to the cloud. Of those respondents, half plan to move more of their business-critical applications to the cloud, and a majority intend to move IaaS (68%) or productivity tools such as email, messaging, and more (65%) to the cloud.
Hybrid cloud dominates: Hybrid cloud models were the preferred approach for 47% of respondents, and a large portion (76%) of IT leaders already worked with two or more cloud providers. Interconnection may step in to help here, with 38% of respondents believing it can improve network optimization and 30% reporting they use it to enable hybrid multicloud.
Investing in innovation: Many IT leaders are looking to futureproof their businesses and take full advantage of evolving technologies, such as 5G, the internet of things (IoT), and Web3. Three-quarters (75%) of respondents said they are moving to an everything as a service (XaaS) model, citing the simplification of IT infrastructure (63%), flexibility (60%), and ability to get every service from one provider (60%) as key reasons for doing so.
Focusing on sustainability: While innovating, IT leaders are keeping a close eye on the sustainability of their IT infrastructure. 57% said they will work with IT partners who can meet key carbon reduction targets, and 56% reported sustainability remained one of their organization’s most important drivers. Indeed, 56% reported that they have a plan in place to manage the environmental impact of growing data usage.

To read more about the Global Tech Trends Survey or download a copy, please visit: Equinix 2022 Global Tech Trends Survey

Quotes

Larry Tam, Managing Director, Equinix Hong Kong:

“The post-pandemic era has unveiled new opportunities for digital leaders to build resilient business models for continued growth. Many organizations in Hong Kong realize the need to rearchitect their digital infrastructure to expedite their growth plans and lay the groundwork to adopt advanced technologies, such as 5G, Web3, AI, IoT, etc. This digitalization movement is also encouraging as we believe it will greatly support the HKSAR Government’s vision to develop the city into a hub for innovation.”

About the Survey

The independent study, commissioned by Equinix, surveyed 2,900 IT decision-makers in diverse enterprises across the Americas (Brazil, Canada, Colombia, Mexico, U.S.), Asia-Pacific (Australia, China, Hong Kong, India, Japan, Singapore, South Korea), and EMEA (Bulgaria, Finland, France, Germany, Ireland, Italy, Netherlands, Nigeria, Poland, Portugal, South Africa, Spain, Sweden, Switzerland, Turkey, UAE, UK). Respondents were selected for participation from Dynata’s online panel. The survey was conducted online between March 1, 2022 and March 29, 2022.

Learn more about The Future of Digital Leadership.

About Equinix

Equinix (Nasdaq: EQIX) is the world’s digital infrastructure company™, enabling digital leaders to harness a trusted platform to bring together and interconnect the foundational infrastructure that powers their success. Equinix enables today’s businesses to access all the right places, partners and possibilities they need to accelerate advantage. With Equinix, they can scale with agility, speed the launch of digital services, deliver world-class experiences and multiply their value.

Forward Looking Statements

This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, the challenges of acquiring, operating and constructing IBX^® datacenters and developing, deploying and delivering Equinix products and solutions; unanticipated costs or difficulties relating to the integration of companies we have acquired or will acquire into Equinix; a failure to receive significant revenues from customers in recently built out or acquired datacenters; a failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; risks related to our taxation as a REIT; and other risks described from time to time in Equinix filings with the Securities and Exchange Commission. In particular, see recent Equinix quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.

Media Contact (Asia-Pacific)
Equinix
Annie Ho
+852 2970 7761
annho@ap.equinix.com

Media Contact (Hong Kong)
TEAM LEWIS
Tweety Chan
+852 3002 3761
equinixHK@teamlewis.com

1. https://www.5g.gov.hk/en/what-is-5g/introduction.html

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