I take this news as further evidence of the ineptitude of C.Y. Leung’s administration.
The SCMP reports this morning:
Google has scrapped plans to build a data centre in Hong Kong.
The decision came two years after a groundbreaking ceremony at its site in Tseung Kwan O – and the land still remains a piece of barren land.
Google said lack of land availability could stop it taking advantage of the lower costs that arise as operations get bigger.
“While we see tremendous opportunity and potential in Hong Kong … we will not be moving ahead with this project,” Taj Meadows, Asia-Pacific policy communications manager, said yesterday, according to the Wall Street Journal.
“To keep up with the rapid growth in users and usage across the region, we need to focus on locations where we can build for economies of scale.”
The Hong Kong government confirmed Google’s “decision to surrender the site”.
Hong Kong Science and Technology Parks Corporation granted the 2.7 hectares to Google for its data centre, which would have housed computer, telecommunications and storage systems. And in 2011, the internet giant said it would be investing US$300 million in the centre.
Google operates 12 data centres globally, and it has announced an investment of US$300 million for a data centre in Taiwan and US$120 million for a facility in Singapore.
Both centres were scheduled to be operational before the new year.
A government spokesman said the surrender request was processed in accordance with the conditions stipulated in the lease, and the corporation was working with Allied Trade Holdings – the name under which Google obtained the site – on the final arrangements of the surrender agreement.
Paul Fung Tak-chung, who runs data centre Photon Link, said: “Google makes use of natural winds instead of air-conditioning in its new data centres overseas. It is environmentally friendly, but hard to replicate in Hong Kong due to stringent plot-ratio requirements.
“I don’t believe the government would relax building regulations for Google no matter how innovative its design is,” Fung added.
Information technology lawmaker Charles Mok blamed Leung Chun-ying’s administration for letting the deal fall through.
“Why didn’t Leung make a call to Google CEO Eric Schmidt?” said Mok.
“I’m sure [Taiwanese President] Ma Ying-jeou or [Singaporean Prime Minister] Li Hsien Loong must do that,” he said.
Back in 2011, Google had announced:
In September 2011, we announced that we had acquired 2.7 hectares of land in the Tseung Kwan O Industrial Estate in Kowloon, with plans to build a data center.
Building this data center in Hong Kong is an exciting step for us. More new Internet users are coming online every day here in Asia than anywhere else in the world. They are looking for information and entertainment, new business opportunities, and better ways to connect with friends and family near and far. We’re building this data center to make sure that our users in Hong Kong and across Asia have the fastest and most reliable access possible to all of Google’s services, so they can do just that.
We are also really excited about the facility itself. At a long-term investment cost reaching USD 300 million, this data center will be one of the most efficient and environmentally friendly in Asia, built to the same high standard we use around the world. It will also provide jobs for around 25 full time Googlers and a number of part- and full-time contractors in a variety of roles, from computer technicians and electrical and mechanical engineers to catering and security staff.
Hong Kong offers an ideal combination of reliable energy infrastructure, a skilled workforce and a location right in the center of Asia, which has made it a trading powerhouse and a great place to provide services to our users around the region and globe. As with all of our facilities around the world, we chose Hong Kong following a thorough and rigorous site selection process, taking many technical and other considerations into account, including location, infrastructure, workforce, reasonable business regulations and cost.
(The page has been taken down but is available in a cached version.)
Over at GigaOm, they suggest that it might be more than just a matter of available space:
But, given U.S. concerns over Chinese censorship, and more recent tensions between China and the U.S. over Edward Snowden’s disclosures of NSA snooping, there might be more than real estate prices at play here.
Venture Beat agrees with GigaOm:
Sure, some people are worried about cloud security when it comes to Google. Leaks courtesy of former NSA contractor Edward Snowden have only made people think more about security of data in the cloud. Such reflection could affect the use of Google’s cloud services.
And it’s possible that geopolitical issues played a role in Google’s steps back in Hong Kong. Hong Kong is part of China, which has been ensnared with allegations of hacking along with the U.S. (A Google spokeswoman did not respond to a question about that.)
But as a rule, Google’s spending on data center infrastructure has been consistent — and vast.
So was this fall-out from the NSA? I don’t think so. Google broke ground at this site two years ago, long before anyone heard of Snowden. Under normal circumstances, construction should have completed by now, or at least have been well under way. Yet the SCMP reports that the site is still “barren.”
I think (although I have no proof, this is a pure guess) is that Google was told that certain things would be allowed and so they went ahead. Then they broke ground and were told, “No, you can’t do this, you can’t do that.” And then, guessing further, while C.Y. Leung might have interceded since there is US$300 million at stake for construction and some jobs, he didn’t try to save it because China hates Google and Leung didn’t want to be seen as standing up for Google – though in fact it would have been standing up for Hong Kong as well.
Whatever actually happened, this is a definite black eye for Hong Kong as a global tech capitol.