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Cloud computing in China

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I visited two cities in China, Chongqing (重庆), and Beijing (北京) in October for personal purposes. Both cities are Municipalities directly under the central government (or Municipality in short). Beijing is the capital. Chongqing was promoted to the Municipality status only 14 years ago in 1997, but its estimated GDP in 2010 had already grown to 723 billion RMB yuan (or $114 billion), more than half of Beijing’s GDP the same year.

When I was in Chongqing, I heard and learned a lot about the “Internet Special District” (or “Cloud District”). Its full name is “International Offshore Cloud Computing Special Management District.”This area is 10 square kilometers in the “Two-River New District” in Chongqing. Within this special district, one can freely access the Internet that is outside of China’s current restrictions. That means one can access many websites that normal Chinese cannot visit; this is a special zone, free of government censorship. Why is there such a special district? Why is this such a big deal?

Let me introduce you to the so-called “Great Firewall of China,” which was the result of “Golden Shield Project” put into operation in 2003. This firewall basically enforced the government’s censorship and surveillance over the content from the Internet. It restricts what can be viewed by the people in China based on some ideological and political views of the Communist Party. For example, one cannot access many sites that are so familiar to the world outside of China, such as CNN, New York Times, and Facebook. Some sites can be seen, but some contents were filtered, thus you can see that graphics or other content is missing. Because of the heavy filtering and surveillance, accessing those sites that can be visited is generally slow also.

In many parts of China, the access to the web is further controlled and scrutinized by the Internet service providers (ISPs), which are most likely organizations, universities, and companies owned by the central government or local or regional government. These institutions also apply their own rules to filter out certain websites depending on their own interests. Also you can’t directly access many search engines such as Google and Bing. BaiDu (百度) is the main search engine for use in China, but it does not return many websites we can find on other search engines, because the content of those websites are prohibited by the government’s censorship policies. For some sites, even though you can see the returned links in the search results, visiting them ends up with broken links, like ebay.com.

The Cloud District in Chongqing was specifically built to allow free access to the World Wide Web as we see outside of China. Within this district, you are supposed to be able to freely connect to any websites from all over the world, not like the other parts of China. Obviously this was trying to attract the foreign investment, such that they will be able to conduct their normal business and be able to host data centers used by cloud.

Pacnet Business Solutions Ltd. (China) invested more than $150 million initially. The plan is for additional funding and investment up to 50 billion yuan (or $7.5 billion) and an area covering 150,000 square kilometers (or 58,000 square miles).

While in Beijing, the big news was that a huge city-sized cloud computing data center is being built in Langfang city, Hebei Province, between Beijing and Tianjin, collaborated with IBM and Range Technology Development Co. Ltd. (润泽国际信息港) This center will be by far the largest data center in Asia, and it will be in use by 2016. How big is it? It’s estimated 620,000 square meters, or 6.4 million square feet. It will employ 80,000 – 90,000 people in its full capacity.

The partnership was established between IBM, Range Technology, and Hebei Provincial Bureau of Industry and Information. IBM will be the technology sponsor to architect and design the entire facility. Although IBM had set up many data centers in six continents, this is its first one in China and the largest in Asia.

IDC had estimated near-zero cloud adoption rate in China, at the beginning of this year, but the estimated market value of cloud computing will reach $88 billion by end of 2012. Some analysts estimate the cloud computing marketing will reach one trillion RMB (or about $158 billion) by end of 2013. This expectation of high adoption rate proved one thing, both the Chinese government and industry realized that China is now behind other industrial countries, and made fierce investment to catch up. According to a survey conducted with IT executives and CIOs in China, 20% of the respondents are already using cloud-based solutions. A further 46% of the respondents indicated that they are either evaluating cloud solutions for use in their businesses, or already piloting cloud solutions.

I also learned that one of the largest cloud computing conferences was held in May 2011. It was the third Cloud Computing China Congress (CCCC), held in Beijing’s National Conference Center located in the center of Beijing Olympic Park. It was called “Congress,” because it had both a conference and an expo. More than 6000 experts, government officials, and industry leaders attended this event.

The second CCCC was held in March, 2010. In that congress, some model projects for innovative development of cloud computing services were decided to be launched in five cities: Beijing, Shanghai, Shenzhen, Hangzhou, and Wuxi. These pilot programs have provided test beds for many various types of research and development (R&D). Experience was gained with these pilots.

Even in this month (November 2011), World Cloud Computing Week China Focus (“Cloud China”) will be held November 28 – December 2, 2011, in Shanghai, China. Also, on November 26, 2011, Big Data China 2011 will be held in Beijing. Although the scale of this conference will be smaller than CCCC as expected, one can see that the more focused areas are also under hot discussion, research and development. A lot of investment from government, private sectors, and research institutes was put into cloud computing. The preparation for the fourth Cloud Computing China Congress (CCCC) in Beijing, in March 2012 is well under way. All of these discussions and communications among the government authorities, and industry and research leaders clearly showed that cloud computing had been identified as serious business and will cause a new revolution in the Chinese economy. Investors from all over the globe have their eyes on the cloud computing development in China.

In a future blog, I will discuss some of the strategies, policies, and problems in China’s cloud computing adoption.

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