Via Financial Times

Google is considering alternative destinations for a planned high-speed internet cable after the US government warned it against building the link to Hong Kong for security reasons.

“We are looking at alternatives. You always have alternative plans or are evaluating alternatives,” said Thomas Kurian, the head of Google’s cloud computing business, in an interview. “When we look at a primary location, it’s always wise to have a secondary one in mind,” he added.

Google, together with Facebook, has backed a 13,000-kilometre high-capacity subsea cable between the US, Hong Kong, Taiwan and the Philippines known as the Pacific Light Cable network. But the US opposes the Hong Kong part of the link on the basis that it could expose global data to China.

The PLCN, first announced in 2017, would be the first direct connection between the US and Hong Kong but the US justice department last week recommended the cable should only connect North America with Taiwan and the Philippines.

Cloud computing companies have been shifting their focus beyond Hong Kong to south-east Asia and south Asia, where they see higher potential for growth.

One of the biggest beneficiaries is Singapore, which wants to be a gateway for cloud providers seeking to access south-east Asia’s 750m people, as well as a data hub in its own right.

Google, which lags behind rivals Amazon Web Services and Microsoft globally, this week became the first of the three big US cloud providers to launch a data centre, formally known as a “cloud region”, in Indonesia. One of the company’s next targets in Asia is India, where it plans to open a data centre in New Delhi in 2021.

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“We are seeing very strong demand from Singapore as an internet hub and as a result we see a lot of data traffic through Singapore,” Mr Kurian said, adding that demand for the company’s cloud services was also increasing significantly in south-east Asia thanks to fast-growing start-ups and enterprises such as regional banks and conglomerates going digital.

Hong Kong’s government has positioned itself as a data hub in Asia but has become less critical for not only US cloud providers but also their Chinese rivals, according to Tao Wu, a senior research analyst for Gartner, a tech research firm.

“Singapore has become much more important than Hong Kong from a location and population perspective,” Ms Wu said. “Other top cloud providers such as Alibaba Cloud are much more focused on south-east Asia to go global than expanding in Hong Kong.”

Both Google and its cloud division, Google Cloud Services, are expanding their footprint in the Asian financial centre, which is also the company’s regional headquarters, Mr Kurian said. While Google did not see any one city or country as Asia’s hub given the region’s size, Singapore had the technical infrastructure to pull it off, he said.

“Whether that pans out or not remains to be seen but we definitely think it has the potential to do so.”

AWS and Alibaba have also both targeted Indonesia, the world’s fourth most populous country. Alibaba launched its first data centre in 2018 while Amazon’s AWS will follow Google late next year or early 2022.