Hong Kong was expected to close 2018 with over 3% growth in its real GDP compared to the previous year. The forecast comes on the back of continued global economic expansion, robust domestic demand and strong external headwinds.
Encouraged by this, businesses operating in the special administrative region of Hong Kong, which forms part of China, are set to increase their information and communications technology (ICT) spending supported by advanced telecommunications infrastructure and established IT vendor landscape.
Key factors driving growth in Hong Kong’s ICT sector are an open-market approach, a business-friendly environment, a simple taxation system and zero export and import duties.
According to GlobalData’s ICT Investment Trends in Hong Kong report, about 38% of respondents based in Hong Kong said their businesses have plans to increase their ICT spending, albeit slightly in 2018, 2 points more than the 6% of respondents who planned to increase their ICT spending in the previous year. Another 10% of respondents claim that their enterprises planned to increase their ICT investments significantly in 2018.
The increase in the number of start-ups in recent years due to funding support and increased infrastructure investments are also helping driving enterprise ICT spending in the country. Moreover, the presence of well established financial institutions, retailers, and logistics hub makes Hong Kong a prominent market for ICT investments.
The survey also highlights that hardware is expected to attract most of the business ICT budget spending, followed by software and, network and communications in 2018.
Most hardware spending will be on security equipment, network equipment, and servers. While enterprise applications and data management and analytics will be the primary software investment targets, while broadband and managed IP telephony service will be the network and communications services that businesses will invest in most in 2018.
Companies in Hong Kong are likely to increase their investment in implementing cloud computing solutions in order to store data and digital platforms and access the same on-demand and on a pay-as-you-go basis.
This will help enterprises increase their platform’s reliability and flexibility and reduce the cost of maintaining IT infrastructure and managing the same.
In the cloud
GlobalData’s survey indicates that cloud management platform, followed by software as a service (Saas) will be the cloud technologies that enterprises will significantly invest on in the next two years, while private cloud remains the most preferred cloud implementation model.
Internet solutions will also attract considerable investment. According to GlobalData’s survey findings, network and security sensors will be the internet hardware solutions that most respondents will invest in, meanwhile, real-time location tracking and internet platforms will be the internet software that attracts most investments in 2018.
Cisco and AT&T are the most preferred vendors for cloud computing and internet-enabled deployments, respectively, for most enterprises in Hong Kong.
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