China is a huge market! Further credence to this statement is given by the fact that estimated worth (roughly) of Chinese industries is around $10 billion mark. Considering the enormity of the Chinese market it’s a wonder why foreign investors and service providers haven’t yet targeted it. Recent report by Washington based Center For Research Intelligence And Analysis or (CRIA) makes it quite clear though! China’s exponentially expanding cloud computing sector could contain some insurmountable hurdles.
Cloud computing infrastructure is being rapidly incorporated and adopted across the world’s most populated country thanks to government support. According to statistics compiled by China Software Industry Association, the overall expansion of country’s cloud computing infrastructure is estimated to reach unprecedented mark of $122 billion in the following two years. The reasons behind this rapid adoption are the boons that cloud computing architecture puts at an organization’s disposal and are pretty common all around the world. In China, the cost saving nature of cloud computing in form of easy data storage and low maintenance cost are the driving factors behind its rapid adoption. This specifically holds true for government agencies, health sectors, finance and petrochemicals sectors. Even then there’s a lot of “wiggle room” and tremendous expansion opportunities.
Promoting cloud computing in the country was a top priority in the government’s plans made public in 2011. As a result thereof, there are over 40 public cloud projects operating in China; the capital Beijing was recipient of $8 billion for construction of servers and erecting requisite infrastructure. Despite all this progress, An Hui director of China Center for Information Technology declared the industry to be in its infancy. This statement is in stark contrast to some displays put on by overzealous officials which contained numerous design faults and minimal utility. Cloud computing in China could face a major hurdle in form of internet speed which is reported to be only 3.15 MBPS which is extensively slower than what people in Hong Kong are getting i.e. 44.14 MBPS.
China may look like the perfect venue for foreign investment as it is best services and technology, but all is not as it meets the eye. Authors of CRIA report advised going ahead with extreme caution to all foreign investors. This report outlines some particularly vast hurdles which foreign investors might face on their foray into China’s cloud market. These hurdles include involvement of China’s People’s Republic Army or PLA leveraging infrastructure and technology for military usage. This was made evident when China’s Electronic Technology Group’s 32nd Research Institute signed an agreement to conduct joint cloud computing research with US companies. The said companies has extensive relationship with the army. Furthermore, CIRA report also highlighted the fact that cloud is under thorough scrutiny of China’s military industrial complex. The Chinese generals have deemed it strategic for harvesting intelligence, its storage and backing up the data.
The effects of such aspects may already be showing as foreign companies are now very weary of further investing into China’s cloud market.