1. Hass And Associates
Hong kong News
SoftLayer and the Intricacies of Asia-Pac Expansion
2. A look at some of the densely-populated racks
within the new SoftLayer data center in Singapore.
3. Asia has become the hot expansion market for data center service
providers. The region’s infrastructure growth trails its surging Internet
population, which is why companies including Google, Amazon, Rackspace,
Digital Realty and Equinix have all been expanding in the region.
But expansion decisions aren’t simple in the Asia-Pacific region, as
providers must weigh multiple variables in audience and operating
environment before investing millions of dollars in a new location. An
interesting case study is provided by SoftLayer Technologies, one of the
world’s largest hosting providers.
Global expansion has been a priority for SoftLayer in recent years. The
company is based in Dallas, but 40 percent of its customer base is based
outside of the U.S. While the customer base has been international, the
company’s infrastructure has just recently started to extend beyond the
U.S. Its quest to expand reveals the challenges and rewards many service
providers face when choosing where to expand in AsiaPac.
4. The company has a data center in Singapore, and added network locations
in Tokyo and Hong Kong in 2011. ”Opening a data center in Singapore gave
us an opportunity to do a few things in the region,” said Mark Quigley, Soft
Layer's Director of International Operations. ”It’s a place for American
companies to house their infrastructure.”
While the company has made significant advancements in its Asia-Pac
business, Quigley discussed the unique challenges in setting up shop in
Japan in particular. Quigley spent a lot of time in Asia during 2012 in order
to help learn the culture and shape Soft Layer's operations in the region.
He finds that in Japan, the culture breeds two contrasting business realities
that create challenges and opportunities for companies like Soft Layer:
Japan is insular and Japan is global.
More Infrastructure in Asia-Pacific
5. Japan is insular because IT purchases there are made through either Japanese firms or foreign
firms that have spent decades building trust and reputation. It’s hard for an outsider to
establish a business quickly, and the process of getting established can be time-consuming
and expensive. “A difficult part would be trying to figure out the telephony support,” said
Quigley. “Asian business culture tends to value face time.”
However, as Quigley points out, Japanese businesses also have a huge need for global reach.
“The capital investment required to go global is negligible compared to their
forebears, because they don’t need to build factories or put elaborate logistics operations in
place anymore,” said Quigley. “Today, a Japanese company with a SaaS solution, a game or a
social media experience can successfully share it with the world in a matter minutes or hours
at minimal cost, and that’s where SoftLayer is able to immediately serve the Japanese
market.”
That’s why SoftLayer isn’t yet planning to open an office in Japan. It has a network location in
Tokyo, an existing customer base, and a number of relationships with existing partners like
Parallels and Citrix who have solid footing there already. It will continue to seek the right
partnerships to enable growing its business in the region.
Rapid Global App Deployment
6. Right now, the company is doing its due diligence and seeking to understand the
market in Japan. This reflects SoftLayer’s methodical approach to expansion
decisions.
“It doesn’t make sense to make a push. It takes time,” said Quigley. “There’s
Japanese business culture to contend with. We’d attracted some Japanese
customers, but we haven’t marketed to the Japanese audience yet. If we were going
to make a full on push, there’d have to be significant changes.”
One promising development is that Japanese companies are becoming more
comfortable shifting their IT infrastructure from on-premises facilities to third-party
providers.
“From a technology adoption perspective, we have in-country companies like
KDDI, NTT, that are actively providing colocation services, dedicated hosting
services, and have started cloud infrastructure (i.e. Nifty cloud by Fujitsu),” said
Quigley. “All are seeing that Japanese companies are starting to outsource their
infrastructure.”
SoftLayer wants its network within 40ms of everyone on the planet, and the Japan
PoP is part of this, allowing it to “cross both ponds” to connect U.S. data centers and
international facilities. The Japanese market is a great opportunity, but as Quigley
discovered, it’s a tough nut to crack. It takes time and commitment to penetrate the
market, and it’s one that remains almost paradoxically insular and global.
Doing Your Homework
