The Youth Olympics here in August presented organisers with a formidable, but temporary, computing hurdle: Manage 3,600 athletes, 20,000 volunteers and 370,000 spectators for two weeks. Rather than buy or lease the equipment necessary to run the event, organisers rented the required computer capacity from a data centre run by Singapore Telecommunications.

The Games were a showcase for cloud computing in Asia: software, data storage, networking and even computing equipment on tap ? as much as a customer desired for only as long as needed.

?In past Olympic games, they had to buy these servers,? said Bill Chang, an executive vice-president at Singapore Telecommunications, ?and then after the Games all this equipment would be fire-sold away.?

Chang said by using cloud services, customers like the organisers of the Youth Olympics could save 60% to 80% of the cost of purchasing the equipment.

The research firm IDC estimates the market for cloud computing in Asia outside Japan will grow to about $1.3 billion this year and will continue expanding at a rate of about 40% a year until 2014.

That figure is just a splash in the estimated $68.3 billion that cloud computing will bring in globally in 2010, according to the research firm Gartner. And for every case of avid adoption, as in Singapore, there are other countries where acceptance is hindered by regulations, concerns about data security and poor Internet connections.

?What will drive adoption is broadband penetration,? said Emilio Umeoka, president of Microsoft?s Asian operations in Singapore. ?If you don?t have the pipe, you can?t get onto the cloud.?

For potential customers, the savings from cloud computing are enticing. Like equipment leasing before it, cloud computing turns what once was a big-ticket capital expenditure into an operating expense for companies ? one that can be tuned up or down, depending on business conditions. ?The savings comes in infrastructure,? Umeoka said. ?Your company would have less services, less people to manage the servers, less people to manage bugs or patches.? What is giving Asian customers pause, though, is the same concern being voiced elsewhere: that a company?s precious financial and customer data could be lost, stolen or even rendered temporarily inaccessible through no fault of its own.

To many, the threat posed by hackers, possible government interference and even power failures justifies keeping their data housed on their own premises, in their own countries. As a result, cloud computing in Asia is taking off faster among small, more cost-sensitive start-ups than among larger companies. China?s big state-owned businesses, for example, tend not to trust third-party providers with their data.

?The propensity to outsource in China is the lowest in the region,? said Philip Carter, a research director at IDC in Singapore. ?It comes back time and time again in surveys to control and risk mitigation. They want to keep control of IT assets.?

Adoption of cloud computing in China is also held back by regulation. Beijing, which also blocks Facebook, prohibits companies from storing their data offshore, meaning they can use data centers only inside China. As a result, IDC estimated, only about 4% of companies in China were using cloud-based services last year, compared with 16% in Singapore. But with about 40 million small and medium-size companies, the Chinese market holds enormous appeal for the providers of cloud computing services. NEC of Japan estimates the nascent Chinese market will grow 30% a year to reach around $2.3 billion by 2012.