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The Growth of Cloud Computing in China

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By Christopher Morris, Tech Commentator

It is considered to be a facile reality nowadays that the cloud is about to change computing as we know it and become a dominant technology in the very near future. But while this has been accepted intellectually, and the Western world has begun to embrace this exciting technology, the focus of attention with regard to this topic has thus far been largely centred on the Western market. Few people have considered how cloud computing will develop and be developed in the so-called emerging nations and economies.

It hardly seems appropriate to describe China as an ‘emerging economy’ today. Most people that pay attention to economic trends already recognise that the Far East nation will become an economic powerhouse, and the world’s most prominent and powerful superpower, in the very near future. This has been evident for some of the Western world’s most perceptive prognosticators for quite some time, but with China having become the world’s second largest economy recently, the days of US hegemony in the world economy appear to be seriously numbered.

Thus, the Chinese market is becoming an extremely fertile one for Western corporations and products, as well as an important one in its own right. And given the fact that cloud computing is to become such an important facet of the IT industry, and a phenomenon that will feed into many other commercial industries as well, it is natural that the cloud will need to be developed in China.

…the Chinese market is becoming an extremely fertile one for Western corporations and products

But given the rather restrictive attitude that the autocratic Chinese state has taken to Internet censorship, no-one is quite sure yet how the cloud will develop in China. Certainly if one is to look at the existing ‘net in the nation then it will be very different in appearance to that which were are accustomed to in the West, thanks to the ‘Great Firewall of China’ which blocks out huge amounts of web content from the Chinese public. So how will the Great Cloud of China look like when it’s developed, how is this process currently emerging, and what consequences will this have for the cloud and direction of the IT industry as a whole?

In fact, cloud computing in China is growing pretty rapidly, despite the fact that the industry is still in its infancy. The number of web-facing computers within the country has grown by nearly ten percent in the last year alone, and the vast majority of this growth has been attributed to the cloud sector. The largest cloud computing provider in China, Aliyun (a spin-off from the giant Alibaba), now has six times more web-facing computers than it did a year ago.

The largest cloud computing provider in China, Aliyun, now has six times more web-facing computers than it did a year ago.

This exponential growth has been achieved thanks to critical financial support from the government. The Chinese government has targeted growth in this sector for much the same reason that the industry has expanded rapidly in the United States; the technology makes data storage convenient, and maintenance costs associated with cloud computing are extremely low.

Thus, the Chinese government declared expansion of cloud computing to be a priority in its 12th Five-Year Plan, which was released in 2011, alongside a raft of other measures which are intended to stimulate next generation industries within the country. The city of Beijing alone received more than $8 billion of support in order to construct servers and other cloud-related infrastructure.

The city of Beijing alone received more than $8 billion of support in order to construct servers and other cloud-related infrastructure.

It is hardly surprising then that Western corporations are already eyeing the Chinese market hungrily. Microsoft has already signalled its intention to tap into this potentially multi-billion dollar source of revenue by stepping up the promotion of its cloud services, Windows Azure, and Office 365, within the nation, as well as putting its promotional muscle behind smartphones and tablets produced by the computing giant which run the Windows Phone 8 platform. Microsoft launched Windows Azure in China recently, and Steve Ballmer, the chief executive of Microsoft has suggested that the firm’s revenue from the China market, comprising the mainland, Hong Kong and Taiwan, will surpass that from the United States in the near future.

However, it is not all plain sailing for the cloud in China. A report to the United States-China Economic and Security Review Commission has stated that laws in China which require foreign companies to partner with local firms could raise security concerns for Western companies, while the Great Firewall of China itself has a seriously negative impact on Internet speeds; potentially hampering the industry’s development.

…laws in China which require foreign companies to partner with local firms could raise security concerns for Western companies

Nonetheless, the potential for expansion in China is obvious. The country has the world’s largest population of Internet users, and by the end of the 2013 there will be 500 million smartphones online in China. The nation will also soon boast the world’s largest number of English speakers, a triad of factors which is sure to mean that the Chinese cloud market is soon up there with the biggest in the world.