When cloud vendors turn their eyes to China, they see a huge market, but don't expect China to simply cede the market to western technology giants. It plans to compete in its own right in a big way.
Just this week, according to a report in the Taiwanese publication Want ChinaTimes, the Chinese are working hard to encourage a domestic cloud business. What's more, there is some feeling in China, according to that article, that it can compete because it believes the western market is really just starting too.
Regardless of how you feel about that, the government is pushing an initiative called "Internet Plus." The plan being promoted by the government is to use the cloud, big data, and other internet technologies to drive new industries in China. In other words, the Chinese see the digital revolution happening all around them and they want a piece of it too.
But companies like Alibaba's Aliyun Infrastructure as a Service unit want to do more than help Chinese companies become more agile and create new domestic economic opportunities, they also want to compete with the likes of Amazon, Google, Microsoft, and IBM head to head in the world market.
As I wrote earlier this month, Alibaba is serious in its ambition. Aliyun president Simon Hu told Reuters, "Our goal is to overtake Amazon in four years, whether that's in customers, technology, or worldwide scale."
That kind of talk sounds like a genuine desire to take some of its vast resources and go at these guys head on. Just this week, Aliyun opened its latest datacenter in Singapore, and announced it would be the site of its international headquarters, opening next month.
The market is a two way street
But it's important to remember this competition could work both ways. While Alibaba/Aliyun may be casting its eyes toward the world, those other players have been having thoughts about a business dalliance in China.
How this all plays out is hard to say. This is not necessarily a simple business competition. It's also wrapped up in all kinds of international politics and economic policies. Yet that hasn't stopped three of the big four US cloud providers from building presence in China—all within the last year.
- Amazon Web Services made the first move, announcing an office in China at the tail end of 2013, and beginning to take on customers at the beginning of 2014.
- Microsoft launched its first Chinese data center in March 2014.
- IBM teamed with another Chinese internet giant, Tencent, on an enterprise cloud initiative in China last fall.
All of this goes to show that China is a vast and complex market, and while the cloud market itself is opening up around the world, each of these enormous companies (along with lots of smaller ones) want a piece of it.
If the US providers can get even a small bit of the Chinese market, it could translate into tremendous revenue, and that's why everyone, less Google, is taking its shot there. Just don't expect the Chinese to sit still while they try.(c) Can Stock Photo