Xath Cruz | cloudtimes
China is the newest country to see the massive potential of cloud computing, and the nation is now throwing its massive weight behind the cloud, with the country currently accounting for around 3% of the global cloud computing market share, estimated to be around $90 billion USD in 2011 alone. Their annual growth rate is also impressive, with analyst firm Gartner’s last figures putting the country at around 40% growth per annum.
In CCID Consulting’s recent Cloud Computing Strategy Research Report, the expectations put forward were for China’s cloud computing market to grow to 117.4b CNY (US$18.6b) in 2013 from the 16.7bn CNY (US$2.62b) last 2010, with their CAGR (Compound Annual Growth Rate) measured at a staggering 91.5%. The Internet Society of China even predicts that the country will have reached 1 trillion CNY by 2015.
Much of China’s growth with regard to cloud computing will come from the encouragement of the Chinese government itself. For example, their National Cloud Computing Industry Development Plan, which was recently accepted and implemented by the State Council and expected to launch within the next few months. The so-called “China Cloud” will cover a wide range of cloud strategies, including development, key tasks, and a technology roadmap designed to support China’s cloud computing industry from 2011 to 2015.
China’s Ministry of Industry and Information Technology is also helping in the push for cloud computing services by providing instructions on their development as well as pilot and demonstration projects in the better half of 2010. China also passed the National Financial Support Program for Cloud computing Demonstration Projects, which is a program that awards a maximum of 1.5bn CNY to the first five cities to start with cloud computing related projects.
China’s goal is to come up with around 10 cloud computing demonstration enterprises within the next 3 years, with the target number of users being 10m and the revenue reaching 5 bn CNY. If they are successful, the worth of China’s cloud computing market will have reached 200bn CNY.
China’s Cloud Pioneers
The first users of cloud computing technology in China will be the government, education, telecommunication, finance, petrochemical, petroleum, and electricity sectors. However, the first real big push for the technology will be targeted towards the public sector, as the cloud computing based systems are seen as a vital enabler, helping improve workplace productivity and efficiency, leading to an overall better service for the citizens.
Chinese Telcos and the Cloud
China’s 3 biggest state-owned telecommunications companies – China Unicorn, China Telecom, and China Mobile – are all key promoters of the country’s cloud computing strategy. They certainly benefit a lot from cloud services due to their huge data center footprints and customer base, as well as the network access capabilities already set in place.
At the moment, all three telcos are competing for the largest piece of the pie in the cloud computing market by offering various cloud-related services such as cloud storage, cloud hosting, and elastic computing. China is currently the strongest company when it comes to network infrastructure, with successful projects in six pilot cities.
IT Players and their Participation
China’s cloud computing strategy also depend on their local IT companies, with their largest search engine Baidu and their largest B2B internet company Ali Cloud Computing being the largest private cloud users. Baidu currently focuses on cloud computing apps while Ali Cloud deals with technology and infrastructure.
Baidu currently has large green data center clusters scattered all over china, with their main use being big data storage and processing, as well as high performance computing and redundant service platforms. Baidu is also the first Chinese company to provide free cloud computing services to users.
Baidu is also a member of the Cloud Computing Standard Committee of the Ministry of Industry and Information Technology, which is tasked with developing the country’s cloud computing standards. It is also collaborating with the Ministry of Science on 2 different cloud R & D projects that delve into network Oses and language translation systems.
Ali Cloud, on the other hand, is one of the early adopters of cloud technology. The company has established their E-business cloud computing data center as farr back as April 2009, with the physical location of the cloud at Nanjing worth 100m CNY. Since then, Ali Cloud has rolled out various cloud computing services, such as the first cloud-based email box and their own cloud storage service.
The Role of Multinationals
China’s big push for cloud computing has a way of attracting attention from large multinational companies. For instance, hardware manufacturing giant Intel recently announced plans to invest more than 10m CNY to Beijing’s ZZNode Technology Co., which is a big telecommunications and IT operations management products provider. Intel claims that their investment is due to their recognition of the massive benefits that cloud computing can bring to China’s industry.
Another large player from the US, American Eucalyptus Systems, has signed a strategic cooperation agreement with a Chinese company, the 32nd institute of China Electronics Technology Group, in order to start a laboratory meant for the R & D of key cloud computing technologies and products.
The Key Benefits of Cloud Computing for China
Like any country, China will benefit a great deal from the cloud’s ability to improve the resource efficiency of various sectors, which in turn will result in a more efficient society. According to the Ministry of Industry and Information Technology’s Mr. Yang, cloud computing is expected to be adopted by more sectors in the future. The main challenge that the Chinese must hurdle with regard to cloud is the fact that they still need to decide on who is going to start building their cloud infrastructure, in order to ensure the security and reliability of their cloud computing platforms. It’s common knowledge that China places a great deal of importance on control and security, but cloud technology needs compromises in those two key aspects in order to maintain interoperability and unification of data formats and standards.