Google feeds 'net giants India and China from data centres next door

Reuters

* Chinese censors, Indian policies lead to offshore datacentres

* Taiwan, Singapore beat out Hong Kong due to spaceconstraints

* Chinese rules favour local companies overforeigners-analyst

By Clare Jim

CHANGHUA, Taiwan, Dec 11 (Reuters) - Google Inc opened its first two data centres in Asia on Wednesday to caterto the world's fastest growing consumer technology markets, butthe company has no plans to open one in China or India.

Choosing Taiwan and Singapore instead illustrates theproblem that tech companies face in trying to feed data demandin the world's two most populous countries: With regulations influx in India and cyberspace censorship in China, Google had tolook next door.

Mobile data traffic in emerging Asia-Pacific countries willlikely rise 68 percent in 2014, well ahead of the global growthrate of 48 percent and the fastest growing region in the world,according to Analysys Mason, a research consultancy. Techcompanies normally try to keep data centres as close to thecustomer base as possible because distance hurts speed.

"While we've been busy building, the growth in Asia'sInternet has been amazing. The number of Internet users in Indiadoubled, from 100 million to 200 million. It took six years toachieve that milestone in the U.S.," Google's vice president ofdata centres, Joe Kava, said in a statement.

"And this growth probably won't slow for some time, sincethe majority of people that have yet to come online also happento live in Asia," he said.

Kava said the cost of building the centres was oneconsideration for locating in Taiwan, but things like dataprivacy policies, a highly trained workforce and networkinfrastructure were equally important.

"It's no secret that the Taiwanese ecosystem for technologycompanies is outstanding," he told reporters. "Being close tothe technology companies will give us opportunity to furthersome of our partnerships" in Taiwan.

The importance of a country's data policies was highlightedby the way Google opened its centres in Taiwan and Singapore andits decision to double spending in Taiwan to $600 millioncompared to $120 million in Singapore.

While Google brought out executives and media to celebrateits Taiwan opening on Wednesday, the Singapore launch receivedno such fanfare.

The company has expressed concern over a Singaporeregulation announced in May that requires certain websites thatregularly report on Singapore to be licensed, put up a S$50,000($40,000) performance bond and take down within 24 hours anycontent that authorities deemed objectionable.

Singaporean opinion news site Breakfast Network effectivelyshut down this week as a result, saying the "demand to registerhas created a wrinkle in our barely formed plans to become asustainable and professional outfit".

Google also announced it abandoned plans to build a thirddata centre in Hong Kong, citing primarily a lack of land.

SERVING 2.5 BILLION

Taiwan, Hong Kong and Singapore are all popular with globaltech companies because they boast well-established privacy laws,reliable power and fibre broadband infrastructure, and skilledworkforces, all essential to operating data centres.

Apple Inc, Amazon.com Inc and MicrosoftCorp are also building data centres in Asia inSingapore, Hong Kong and Tokyo. But the real appeal is the giantnumber of Internet users in China and India.

Google left mainland China in 2010 after a cyber attack andExecutive Chairman Eric Schmidt told the Wall Street Journallast month that the company is in no hurry to return.

"China's censorship regime has gotten significantly worsesince we left so something would have to change before we comeback," he said.

That left an opening for China's Baidu Inc tofurther dominate the search engine market with a 66 percentshare this year, according to web analytical tool StatCounter,and another local rival, 360 Search, to emerge, grabbing 21percent. Google's share dropped to 9 percent from 41 percent in2009 before its exit China.

"The regulatory environment in China is designed in a way tonurture local service providers such as Alibaba, so it makes itharder for foreign companies to enter the market," techresearcher IDC analyst Leon Kao, who is based in Taipei, said.

"But adding service support in Asia such as Hong Kong stillincreases a company's flexibility. For example, Amazon is ableto deliver goods in a much shorter time now if there's a suddensurge in orders."

In India, Google dominates 97 percent share of the searchengine market, data from StatCounter showed.

"In India, the challenge is mostly the cost ofinfrastructure and the ability of building infrastructure", saidRadhaKrishna Hiremane, Intel Corp's Asia-Pacificregional product marketing manager of data centre business,based in Singapore.

He said putting an India-focused data centre in Singaporemay not cost more, but it could affect speed.

"What matters is latency. At the end of the day, if aservice provider is able to provide acceptable latency for theend customers by serving from outside the region and there's noconflicting regulation such as data sovereignty, then there'snot anything in the APEC countries we know would be an issueright now."

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