Achieving success in the China cloud market means you have to understand a complex and often contradictory set of rules and challenges that can keep companies from getting the full value of their cloud adoption and often diminish the benefits that led to a decision to migrate to the cloud in the first place.
The market for cloud infrastructure and software in the world’s second-largest economy is expected to quadruple by 2021 to $9.8 billion from $2.4 billion last year, according to forecasts by IDC. While the regulatory framework and economic model that governs the cloud in China means the market can seem murky at best and global cloud infrastructure and service providers will undoubtedly continue to struggle to gain clarity, the sheer size of the country’s economy means its significance will only grow.
Under the circumstances, we find ourselves relying on a mixture of supposition and firsthand experience to grasp and participate in this enormous market. What it all boils down to is that planning ahead takes on new meaning behind the Great Firewall, and there are strategies that can be used to mitigate the risks and challenges associated with cloud migration and management in the region.
The Tip Of The Iceberg
While Chinese e-commerce titan Alibaba saw cloud revenue soar by 127% over last year to $675 million, Chinese cloud providers continue to offer a fairly limited scope of features such as elastic computing and storage. This makes it particularly difficult to address the same business imperatives that drive cloud adoption in the U.S. and other competitive markets, namely automation, scalability, self-service and a rich marketplace of apps and services.
Although the cloud is under rapid development in China, regulatory requirements simply don't allow foreign companies to offer cloud services without first partnering with local companies. Provisioning and migration times are significantly longer, in no small part because operations must be conducted by the local partners themselves. The fact is that, while it is possible, adopting a cloud infrastructure that does not have a physical presence in China places companies at an enormous disadvantage.
In response, cloud providers such as Amazon Web Services and Microsoft Azure have Chinese operations that are logically separate from their worldwide platform. This stems not just from regulatory restrictions but also security concerns, making it impossible to provide cross-border migration and data replication.
Chinese enterprises and multinational companies with operations in China encounter added complexity in their cloud migration when they adopt foreign cloud service providers with whom they are faced with a separate Chinese cloud with limited ability to share across the global system.
There’s no way around it: Service providers have to cooperate with local partners to run public cloud services. Nowhere has this become more apparent than with Google’s acrimonious relationship with China which stems from a long-standing feud over the country’s policy of censoring internet content. Google isn’t planning local cloud-based services as a result, which has made it difficult for the company to challenge AWS and Microsoft Azure.
Plan And Prepare For Success
When looking for a cloud partner, you need to know about the phenomenon of “cloudwashing,” which refers to the practice of some Chinese cloud partners to make deceptive or unsupported claims about their capabilities and services. Always scrutinize migration roadmaps and offerings to ensure that the partner is, in fact, able to provide what has been promised, at the price agreed upon and within a reasonable timeframe.
You should also anticipate delays. For instance, the Chinese authorities are often not clear about the licensing process for U.S. cloud organizations and often struggle with transparency issues, according to a recent USCBC survey. There are several classifications under which cloud services may be authorized and there is often no well-defined procedure to file and record permits. The administrative maze can only be navigated by a competent local cloud partner, and even then it sometimes seems to be more a matter of creative negotiation rather than satisfying specific rules.
China also strictly requires registration of websites before they can go online which can take weeks or more to complete. These filings and licenses are complicated, requiring that a company provide domain ownership details and that a company representative appear in person to complete the process.
Finally, bandwidth is a serious consideration in China. Service providers invariably offer options according to port speed rather than the data transfer since they require pre-payment which is made easier by fixing the price in advance. This means, of course, that it is difficult to know how much bandwidth you’ll need for your migration project and because many providers require per-server bandwidth purchases, companies with diverse API and web servers will find it much more challenging to scale their migrations.
The Chinese cloud market keeps evolving, and despite the differences -- which are often vast -- the opportunity has never been in doubt. As Chinese enterprises become ever bigger consumers of the cloud, foreign companies will need to master working with Chinese partners, even subsidiaries of American companies like AWS and Microsoft, to expand their offerings and tap in behind the Great Firewall.
Regulations and compliance can be difficult and even costly at first, but with a good Chinese intermediary, successful cloud migration and the incumbent benefits of the cloud are closer at hand than you may think.
