The China Data Center Market is expected to register a CAGR of 12% over the forecast period 2020 - 2025. Increased smart cities initiatives, procurement of renewable energy resources, increase in cloud-based services, and rise of digital transformation and expansion of colocation and hyper-scale Datacenter facilities are expected to drive the data center market in China.
- Growing demand from enterprises will propel the growth of cloud computing and other associated data services in the region. Also, advancements in data center technology along with its integration with other associated services are the key driving factor for the growth in the region.
- With the rapid development of 5G, the internet of things, artificial intelligence, virtual reality and the commercial application of these new cutting-edge technologies, the demand for data processing and information interaction is increasing, which will speed up the construction of data centers in the region and lead to the explosive growth of the industry.
- Along with the continuous booming of online streaming, gaming, and e-commerce, Internet industry contributes the most significant demand for China data center market. Moreover, traditional industries are encouraged by policies to embrace digital transformation and enhance their adoption of IT technologies so their demand for IDC services is also on the rise, driving the market growth even further.
- Moreover, government agencies are fueling the growth of the digital economy and initiatives toward the development of smart cities will continue to boost the need for edge computing during the forecast period.
- China leads the world in internet consumption, with 710 million people online, according to a recent report by CNNIC (China’s Internet Network Information Center). As demand for cloud computing and other data services continues to grow in China, advances in data center technology can be expected to play a key role in both the integration of these technologies with modern manufacturing, and China’s gradual transition to a service economy.
- The COVID-19 outbreak has an overall positive impact on China Data Center Market and is likely to grow over the coming years as there are potential major opportunities coming up in digital platforms and big data, online healthcare services, online classroom and education, remote office and online activities, industrial 5G applications, unmanned commerce and services, which are likely to boost the market growth in the region.
Key Market Trends
Hyperscale Data Center to Drive the Market Growth
- The growing need for data centers and cloud resources from both the consumer service and business perspective has led to the development of large-scale public cloud data centers, called hyper-scale data centers. According to Cisco, hyperscale data centers are expected to increase by more than 60% by 2021, as compared to 2016.
- The data center has become a hotspot of the IT market in China in recent years. As the cloud becomes more popular, more hyperscale data centers are also building up. IT vendors are looking for the opportunity of the data center market and thereby boosting the market growth.
- The huge resource needs of applications such as big data, IoT, social networks and IaaS are leading to growing demand for hyperscale data center architectures in China as they allow users to seamlessly add on-demand computing resources from any location. Another key driver is the need for customers to continue to receive quality and secure data center infrastructure, facilities and services as they expand internationally.
- In China, the distribution of hyperscale data centers is highly correlated with the level of IT adoption in a region. Under normal circumstances, regions with higher level of IT adoption could offer sufficient market demand and resource readiness, which are the key prerequisite to establish large-scale data centers. However, due to the guidance of local government policies, there are increasingly more large-scale data centers in progress within the regions of lower level of IT adoption.
Phenomenal Growth in E-commerce is Fuelling Demand for the Market
- China’s stride into fifth-generation mobile telecommunications technology and the booming e-commerce sector is elevating the value of data centres.E-commerce and financial services sectors are adopting digital technology for efficient business processes. Currently, more than 70% of the population in China are using e-commerce services for performing commercial and non-commercial activities.
- Data Centers are secure, temperature-controlled facilities equipped with multiple power sources and high-bandwidth internet connections. These purpose-built facilities are used by enterprises to remotely store large amounts of data, manage business applications, and host cloud computing operations.
- The proliferation of mobile payment systems has been a lightning rod in fuelling the demand for data center infrastructures for these E-commerce company. Moreover, to reduce overall operational complexity, while increasing flexibility, scaling, and efficiency, data centers are extensively used in the e-commerce industry.
- Owing to the increasing use of high-performance computers in the data center that helps businesses quickly and effectively crunch their data, the data centers are likely to offer better opportunities in e-commerce sector both in supply and demand-side and thereby boosting the growth of the market.
The competitive rivalry in the China data center market is high owing to the presence of some major players such as Alibaba Group Holding Limited,China Mobile amongst others. Their ability to continually innovate their offerings has allowed them to gain a competitive advantage over other players. Through strategic partnerships, research & development, and mergers & acquisition they have been able to gain a stronger foothold in the market.Some of the key development in the market are :
- In December 2019 - China Mobile International has opened a data center in the UK, marking its first such facility in Europe. The new site serves as an international network exchange hub and internet data center (IDC) and will facilitate connectivity between Asia and Europe.
- In January 2019 - Alibaba Cloud, the cloud computing arm of Alibaba Group launched its second data center in Japan, catering for the rising demand from customers who are required to process and analyze a large volume of data using machine-learning technologies. The launch comes with the latest advanced cloud offerings, with more than double capacity within the country.
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1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET DYNAMICS
4.1 Market Overview
4.2 Market Drivers
4.2.1 Increasing Demand for Supercomputing
4.2.2 Increasing Investment in Quantum Computing
4.2.3 Phenomenal Growth in E-commerce and Hi-tech Industries
4.3 Market Restraints
4.3.1 High Power Consumption of Data Centers
4.4 Value Chain Analysis
4.5 Porters Five Force Analysis
4.5.1 Threat of New Entrants
4.5.2 Bargaining Power of Buyers/Consumers
4.5.3 Bargaining Power of Suppliers
4.5.4 Threat of Substitute Products
4.5.5 Intensity of Competitive Rivalry
4.6 Assessment of Impact of Covid-19 on the China Data Center Market
5 MARKET SEGMENTATION
5.1 IT Infrastructure
5.2 Electrical Infrastructure
5.2.1 UPS Systems
5.2.3 Transfer Switches and Switchgears
5.2.4 Rack PDU
5.2.5 Other Electrical Infrastructures
5.3.1 Enterprise Data Centers
5.3.2 Managed Services Data Centers
5.3.3 Colocation Data Centers
5.3.4 Cloud Data Centers
5.4 Tier Standards
5.4.1 Tier I &II
5.4.2 Tier III
5.4.3 Tier IV
5.5 End User
5.5.2 Telecom and IT
5.5.4 Media and Entertainment
5.5.6 E- Commerce
5.5.7 Other End - Users
5.6.5 Rest of the China
6 COMPETITIVE LANDSCAPE
6.1 Company Profiles
6.1.1 Alibaba Group Holding Limited
6.1.2 China Mobile Limited
6.1.3 China United Network Communications Group Co. Ltd.
6.1.4 China Telecommunications Corporation
6.1.5 Centrin Data Systems Co. Ltd.
6.1.6 Equinix Inc.
6.1.7 AT&T Inc.
6.1.8 Digital Realty Trust Inc.
6.1.9 Fujitsu Ltd.
6.1.10 Tencent Holdings Ltd.
7 INVESTMENT ANALYSIS
8 MARKET OPPORTUNITIES AND FUTURE TRENDS
Secondary Research Information is collected from a number of publicly available as well as paid databases. Public sources involve publications by different associations and governments, annual reports and statements of companies, white papers and research publications by recognized industry experts and renowned academia etc. Paid data sources include third party authentic industry databases.
Once data collection is done through secondary research, primary interviews are conducted with different stakeholders across the value chain like manufacturers, distributors, ingredient/input suppliers, end customers and other key opinion leaders of the industry. Primary research is used both to validate the data points obtained from secondary research and to fill in the data gaps after secondary research.
The market engineering phase involves analyzing the data collected, market breakdown and forecasting. Macroeconomic indicators and bottom-up and top-down approaches are used to arrive at a complete set of data points that give way to valuable qualitative and quantitative insights. Each data point is verified by the process of data triangulation to validate the numbers and arrive at close estimates.
The market engineered data is verified and validated by a number of experts, both in-house and external.
REPORT WRITING/ PRESENTATION
After the data is curated by the mentioned highly sophisticated process, the analysts begin to write the report. Garnering insights from data and forecasts, insights are drawn to visualize the entire ecosystem in a single report.