For a multinational wanting to establish direct online presence in China for products and/or cloud based XaaS selection of a Co location Data Center provider is an important decision.

1. Asia Based Colocation Data Center
Options to Support Customers in China
For a multinational wanting to establish direct online presence in China for products
and/or cloud based XaaS selection of a Colocation Data Center provider is an
important decision.
William Kohnen

2. Assumptions of Discussion
• Multinationals wanting to establish direct online
presence in China for products and/or cloud
based XaaS
• There is a desire to locate the data center
regionally
• Building a data center in China is not an option
• Relative to similar requirements in the US overall
costs will tend to be higher in Asia so this is not
an outsourcing to save cost driven project.
William Kohnen

3. Most Likely Options
• Singapore
• Hong Kong
• China
William Kohnen

4. Hong Kong and Singapore
• Mature technology dependent industries such as
banking require data centers built based on similar
standards as those in the US and Europe
• As a result both Hong Kong and Singapore attractive
because of:
– Stable and adequate electricity supply as well as good
backup power,
– Telecommunication infrastructure
– Security
– Rarely suffer from major natural disasters
– Both have government support and encouragement for DC
industry. Singapore has more tangible support.
William Kohnen

5. Hong Kong and Singapore Concerns
• Real Estate Prices High Impacting Cost
• Existing Centers constrained for expansion
• Outside of China Firewall so potential
connection/latency issues
• Perception of Chinese partners and officials
about not have DC in China
William Kohnen

6. Benefits of Colocation in China
• Take advantage of new technology and not be
held down by legacy applications and business
processes
• China has a competent labor pool from which to
draw the necessary skills to build and
support data center operation.
• Inside the China Firewall so less likely for
erroneous filtering resulting in interruption of
cloud service
• Best performance for China based customers
William Kohnen

7. Geographic Distribution of Colocation Data Centers in China
25%
18%
11%
7%
7%
4%
4%
4%
5%
5%
5%
5%
Shang Hai
Bejing
Shenzhen
Hangzhou
Chengdu
Gaoxin
Guangzhou
Hangzhou
Haikou
Wuxing
Taiyuan
William Kohnen

8. Concerns
• Majority of higher end Centers are still concentrated in major
business cities
• Existing Data center facility design in both Beijing and Shanghai lag
behind more mature markets
• In these locations, real estate costs are rapidly rising and data
center managers need to carefully plan for space if they are to
ensure effective use of prime resources.
• While labor is less relative to the Silicon Valley, HKG and Singapore
others costs are comparable and make up the majority of DC
operating expense
• Connectivity costs can be significantly higher
• Operational standards are not as uniform as in the US
• Power constraints
• Logistics of purchasing and maintenance of equipment
William Kohnen

9. Upon Deciding To Locate Colo DC in China
• Take time for careful review – might take 6 months and multiple reviews and visits
• Remember as a general rule starting a new business relationship in China follows a
different process
• The Basic Elements That Will Impact Total Cost Are the Same as Anywhere
•Options to reduce
and improve your
cost and
performance.
•Does current
provider have
limitations that
prevent
optimization?
•Comparing Regions
and Countries
• Competitiveness
relative to other
providers.
• Past, Present, Fut
ure
Provider Location
Support
Strategy
Hardware
and
Configuration

10. Specific Things To Look At carefully
• Make sure to really take time to review a providers
actual operation
• Identify and areas where the providers are not
following your version of standard practice
• The most common problem people have faced is not
planning for growth and the data centers reaching
capacity within a matter of 18 months
• Understand the Logistics support for equipment
• Look closely at the process for on site support and
monitoring
• Consider the cost and response time needed when you
need to deploy staff to the Colocation site.
William Kohnen

11. Summary
• There is no single correct solution
• Continuum of choices although with right plan
can mitigate
Location Start Up Risk Ongoing
Support
Absolute
Cost
Performance
for China
based
Customers
Singapore Easy Low Easy Highest Good
Hong Kong Easy Low Easy High Better
China top
Tier
Challenging Moderate
Challenge
Moderate to
Easy
Moderate Best
China Lower
Tier
Difficult High Moderate to
Difficult
Lowest Good to
Better
Ultimately best solution might be to work with a large global DC provider to ease
into China or if you have a business partner in China you trust have them manage
the Colocation sight selection and support .
Either way it is important to stay engaged with the process.