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Cloud computing frenzy sweeps China, but to what end?

  • Staff Reporter
  • 2012-01-16
  • 11:03 (GMT+8)
A digital publishing cloud computing center in Tianjin. (File Photo/Xinhua)

A digital publishing cloud computing center in Tianjin. (File Photo/Xinhua)

Cloud computing has triggered an investment frenzy in many cities in China but observers are uncertain about the eventual result of the push to put money into the young technology.

At issue is how to transform the information resources of cloud computing centers into useful applications to bring actual benefit to the public and firms. Li Youping of the Chinese Academy of Engineering said that the investment frenzy is premature, as a mature business model for cloud computing has yet to be established.

The southern city of Guangzhou plans to invest 1.8 billion yuan (US$284 million) in a cloud computing center. The city government has also publicized an action plan for the development of a cloud computing industry, which will apply the technology to governance, medicine, education and urban management.

In October 2010, the Ministry of Industry and Information Technology designated the cities of Beijing, Shanghai, Shenzhen, Hangzhou and Wuxi to carry out trials on the innovation and development of cloud services. Other municipalities have subsequently found themselves on the bandwagon.

CCID Consulting predicts that the market scale of China's cloud computing market will reach 60.6 billion yuan (US$9.58 billion) this year. By the end of the government's 12th five-year economic plan (2011-2015), China's cloud-computing market will be between 750 billion and 1 trillion yuan (US$118.6 billion and US$158 billion), the consultant said.

An industry insider points out that many cities only focus on the construction of cloud computing centers, without actual plans to utilize the efficiency the technology provides. Tian Feng, supervisor of telecom equipment provider ZTE, notes that the equipment utilization rate of cloud computing centers in Beijing, Shenzhen and Chongqing reaches just 25% at most.

The cloud computing investment frenzy, however, has caused excitement among IT hardware suppliers. An insider points out that the global sales of servers by Intel and AMD top 2.1 million units a year, including 600,000 units in China. Chongqing alone, meanwhile, is planning a cloud computing center to be furnished with 300,000 servers.

 

 

References:

Li Youping 李幼平

Tian Feng 田鋒

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