Sunday, April 18, 2010

The Communal Clouds of China

BEIJING - AUGUST 08:  Basketball player Yao Mi...Image by Getty Images via Daylife

After spending a week in the Peoples Republic of China I discovered that unlike the air quality a few things have become particularly clear to me. Saying cloud computing is big in China may be the understatement of the century -- it's gargantuan. It is the topic Du Jour. During my trip I had the opportunity to meet with some of the biggest players in the Chinese cloud computing scene ranging from large startups to massive state sponsored companies. All had the same story to tell, cloud computing is the future of IT. Today I thought I'd take a moment to describe a few of the more interesting opportunities I uncovered while in Beijing last week.

One of the more particularly interesting opportunities I discovered while in China was what I would describe as a Communal Cloud -- Cloud infrastructures built in conjunction to Special Economic Zones setup by the PRC. For those of you unfamiliar with the Special Economic Zones (SEZ) of the People's Republic of China. The government of China gives SEZs special economic policies and flexible governmental measures. This allows SEZs to utilize an economic management system that is especially conducive to doing business that does not exist in the rest of mainland China. You can think of these zones as massive city sized industrial parks focused on fostering economic growth in particular market segments. (I will say that economic growth is something that appears to come easy in China these days) Many of these zones also now feature their own on site data centers for the industries located within these areas. So the cloud use case I was told about is to offer state sponsored cloud computing to these companies. A kind of communal cloud made available at little or no cost. An IT based economic incentive of sorts. Kind of a cool idea.

Another thing I noticed while I was in Beijing was the sense of prosperity sweeping the city. My western educated business partners for example drove brand new Lexus's. The restaurants they took me to all seemed to have Ferrari's, Maserati's and other expensive European cars parked out front. Many discussions revolved around the very real possibility of a startup having an IPO on the Chinese stock market. Something that in North America has for a long time not been an option. Needless say, the smell of money was in the air (some may call it pollution).

Yet Another interesting thing I noticed was that of scale. Even the smallest startups had 50 employee's with many two year old companies boasting hundreds of people. One of the largest data center providers I met with, a company formed in 2005 claimed to have more than 100 million (USD) in revenue in a little over 4 years. Impressive growth to say the least. All the more impressive was their customer base was almost completely made up of China based companies. The Chinese market isn't just hot, it's on fire.

As for me, business is booming in China. More news to follow in the next few weeks.

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