Chinese companies comprise the leading group of players in each of four key market segments - data center hardware/software, cloud computing services, colocation and CDN. In the services markets Chinese operators in total account for well over 80% of revenues, while in the data center hardware and software side the market is a little more open to competition, but Chinese vendors still account for over half of all revenues. In aggregate, annual revenues for these markets are now running at well over $15 billion per year and are growing at over 16% annually.
As in all other regions, the market for data center hardware and software (servers, storage, networking, security, OS, virtualization software) is still much larger than the market for cloud services (IaaS, PaaS, hosted private cloud services), but the booming cloud market has a much higher growth rate. Meanwhile colocation providers, who house data center facilities for both enterprises and cloud providers, continue to grow strongly, and the CDN market too continues to evolve. In all four of these markets, China is either the second or third ranked country in the world in terms of quarterly revenues, but has much higher growth rates than the other leading countries. The market leaders in cloud and data center services are China Telecom, Alibaba, China Unicom, ChinaNetCenter, 21Vianet and Tencent; the market leaders in data center hardware and software are Huawei, Inspur and Lenovo.
“The difference between China and all other countries is striking,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “The markets for cloud services and for data center infrastructure are truly global in nature and in all regions they are dominated by US-headquartered companies, but China stands out as the one huge exception. Going forward it is difficult to see US companies making too much headway in China, but there is no doubt that some of the Chinese companies will have an increasing impact in countries beyond China.”