New York, Aug. 31, 2020 (GLOBE NEWSWIRE) — Reportlinker.com announces the release of the report “China Data Center Market – Growth, Trends, Forecasts (2020 – 2025)” – https://www.reportlinker.com/p05954288/?utm_source=GNW
2% during the period of 2020-2025 (henceforth referred to as the forecast period). Growing demand for computing power is driving data center efforts in the country. The country is boosting its computing power and has become a prominent nation in terms of supercomputer volume. China continues to rise and now as of June 2020, has 227 supercomputers, up from 219 previous June, in the top 500 list as per the data published by top500.org. The US was a distant second at 113 supercomputers on the global list.
– Moreover, China is highly focusing to take the lead over global peers in data center construction, with larger enterprises looking to scale up their data centers to ensure stability and reliability of data services, as the application of 5G, wearable devices, internet of things, and artificial intelligence spurs a burgeoning demand for computing power.?
– Further the country has active data center players who have increased their focus on investing in constructing new data center facilities. For instance, Alibaba Cloud has recently completed the construction of three super data centers in Hangzhou, and Ulanqab City, Nantong. Together, they provide enough space to host one million additional servers. ?Recently in April 2020, the company announced that it was planning to spend CNY 200 billion (USD 28.2 billion) on its cloud infrastructure over three years. The expansion was said to be driven by the increased demand for digital resources resulting from the COVID-19 pandemic.?
– The outbreak of the COVID-19 pandemic has increased data usage. According to a report on the impact of the COVID-19 pandemic on China’s entertainment industry by Maoyan Entertainment, a leading platform providing innovative Internet-empowered entertainment services in China, movie industry was severely hit by the pandemic, the online entertainment market, including TV and streaming platforms, were booming as people were confined to their homes. As China gradually emerges and recovers from its Coronavirus lockdown, it’s clear that video streaming, e-commerce, games, and other businesses that rely on data centers will be in more substantial positions. The whole nation, 1.3 billion people, was locked down from early January until late March relied on e-commerce and home delivery, but the occasional breakdowns meant that, once the pandemic is safely over, the new investment will follow.
Key Market Trends
Phenomenal Growth in E-commerce to Boost the Market Growth
– China’s stride into fifth-generation mobile telecommunications technology and the booming e-commerce sector is elevating the value of data centers. E-commerce 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.
– According to the CNNIC, in 2013, gross merchandise volume on online shopping amounted to about CNY 1.9 trillion. Chinese online shoppers are expected to spend about CNY 11.3 trillion on internet markets by 2020. The number of online shoppers in China have surpassed the 700-million-mark in 2020, representing more than half of its population.
– In April 2020, Alibaba Group Holding Ltd. announced to invest CNY 200 billion (USD 28 billion) on cloud infrastructure such as data centers over the next three years, a major effort to extend one of its fastest-growing businesses to more countries. By increasing their investment in cloud infrastructure and fundamental technologies, the company hopes to continue providing world-class, trusted computing resources to help businesses speed up the recovery process, and offer cloud-based intelligent solutions to support their digital transformation in the post-pandemic world.
– The proliferation of mobile payment systems has been a lightning rod in fueling 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.
Shangai is Expected to Hold Major Share
– Shanghai is one of the most advanced data center markets in China, in terms of its connectivity ecosystem comprises approximately 41 colocation data centers and 56 cloud service providers. Also, Shanghai plans to invest in technologies like 5G, artificial intelligence, cloud, data analysis, smart city, and many more, which are expected further to boost the demand for data centers in the region.
– Also, recently, Shanghai rolled out a new development plan for its free-trade zone that focuses on the construction of 5G networks, internet of things connectivity, edge computing, and improved data hubs. Strong support from the local government to foster the digital economy provides growth opportunities to several solution providers in the region to meet the region’s growth in cloud adoption and the increase in demand for low-latency infrastructure.
– As part of their expansion of digital infrastructure in the region, Chayora Limited opened a new office in Shanghai. Also, GDS Holdings Limited, a Chinese data center operator, acquired a site in Pujiang County, near Shanghai, for around CNY 1.37 billion (USD 200 million). It will be used for a significant new data center campus, which GDS intends to develop in multiple phases over several years. Also, GDS Holding Limited formed a joint venture with CITIC Private Equity Funds Management to acquire the Beijing Data Center facility.
– The region is also witnessing strategic collaborations of companies with solution providers to expand its data center requirements. For instance, China’s IT services provider Shanghai AtHub recently received a letter of intent from the internet giant Alibaba for a data center project. Under the project, AtHub will construct five custom hyper-scale data centers and operate these data centers on behalf of Alibaba. The data centers comprising enhanced infrastructures such as diesel generators, cooling systems, and uninterruptible power supplies
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 :
– July 2020 – Digital Realty Trust Inc. has deployed the industry’s first Data Hub powered by the NVIDIA DGX A100 at its Interxion Digital Docklands Campus near the heart of London’s financial center. The company is accelerating digital transformation by introducing a new AI-ready infrastructure solution that enables customers to rapidly deploy AI models in close proximity to their data sets.
– April 2020 – Equinix Inc. announced its largest expansions of Equinix Cloud Exchange Fabric in seven new EMEA markets to help global businesses simplify hybrid and multi-cloud infrastructures. With this expansion of Equinix’s industry-leading interconnection service to Barcelona, Brussels, Geneva, Istanbul, Lisbon and Sofia, and extending into Hamburg in Q2 2020.
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