Cloud atlas: A weather forecast on the Chinese cloud industry

We’ve already talked at length about the division between the Chinese Internet and the rest of the world. It’s a schism that has broad-reaching effects on censorship and culture, and it also has a heavy impact on the development of the Chinese cloud industry.

That industry, like its nebulous namesake, is itself vague and undefined. These days it has become such a buzzword that almost anything related to the Internet will have the label slapped onto it. As such, in our survey of the Chinese cloud industry, we’re going to look at several different cross-sections, from back-end computing infrastructure to personal storage.

Cirrus Clouds

To get the forecast for the current state of the cloud in China, I spoke with several members of the industry at companies ranging in size from startups to Internet giants. Everyone agreed that the country’s infrastructure is still a few year’s behind its counterparts in the west.

Alibaba Group, which has established itself as one of the leaders in the move to the cloud with its Aliyun platform, put it this way:

“The cloud computing industry in China is in early developmental stages at this time, adoption of cloud computing services and technology has taken off in recent years and is serving more and more customers; however, user familiarity and understanding of the technology is still underdeveloped as the cloud has only been introduced in the past few years, and applicability still has room to diversify in the Chinese market.”

It may feel like a broken record to talk about yet another growth-story industry in China, but the evidence points to the cloud as being one of those industries. Figures compiled by Cloud Times suggest that the country currently represents just 3 percent of the global cloud market, with Gartner projecting 40 percent annual growth. In terms of money, the Chinese cloud industry is projected to reach $18.6 billion in revenue next year.

In its recent Global Cloud Index report, Cisco forecast that the Asia region will generate the most cloud traffic and workloads around the world by 2016. China is expected to be among the countries that “will contribute heavily” to that trend.

The Chinese market is currently led by domestic companies, since multinational cloud giants have yet to gain a foothold there. Amazon does not offer its Amazon Web Services to China, while Microsoft is only now beginning to enter the local market with its Azure service and it has established an accelerator to promote it.

According to Alibaba, the main challenges that China faces for growth in its cloud industry lie in “the Internet infrastructure, policy and operational areas. On the other hand, it views “high reliability, scalability, cost effectiveness and easy deployment” as benefits existing in the Chinese market.

The company’s strategy isn’t just based on providing cloud infrastructure. The company is also working with small and medium-sized businesses to provide free market information and statistical data as part of its cloud operations, and it has partnered with the YunFen Fund on an RMB 1 billion ($161 million) fund for developers using Aliyun’s cloud engine. Meanwhile, Alibaba has developed the Aliyun mobile operating system to take advantage on the front end. After butting heads with Google over whether the OS counts as an incompatible fork of Android, the company recently spun off Aliyun.

“Alibaba Group and Alibaba Cloud Computing have also recognized the strength and value of the mobile Internet in the greater Internet industry and seen its phenomenal growth and traction over the years; the mobile OS is one of these platforms that will help to create an enhanced user experience for consumers,” the company said.