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Companies' future is in the cloud (3)

By Gao Yuan (China Daily)

08:17, January 21, 2013

Ground realities

According to CCID Consulting, the turnover of China's cloud market is doubling every year and is estimated to reach 117.4 billion yuan by the end of this year. Four years ago, the cloud was still a concept that was considered too fancy and unrealistic by most of the Chinese entrepreneurs.

A popular saying among the chief information officers of Chinese companies in 2008 was: "Cloud is too illusory and up in the sky, to do corporate IT you have to be down to earth."

China's cloud-computing industry started to enjoy a rapid growth after companies realized that the technology will increase data use efficiency and help decision making, said CCWResearch. It expects further fast development in China until 2015, around the time that most Chinese customers finish their cloud upgrading works.

"By 2015, the cloud will be just a generic name for common as-a-service delivery modes for supply of business and IT services," said Chris Morris, associate vice-president of IDC Asia Pacific.

Because virtually every competitor will adopt cloud-computing services, the cloud-marketing label will enjoy "negligible value" for competitive differentiation, he said.

Traditional industries such as education, finance, energy and telecommunications will fully embrace cloud technology in the coming years. As China is keen to upgrade traditional industries in a bid to boost domestic consumption, cloud-computing providers will receive more customers, industry experts said.

The future landscape will be the convergence of the private cloud and the public cloud as well as the hybrid model, where the cloud coexists with the companies' current IT infrastructure. Each one is going to drive one another, said Dean.

"While a private cloud may reduce security concerns, the public cloud will also have its own business services being defined and offered. For SMEs, it makes more sense to procure those services from the public and build, integrate them into the private networks," Dean said.

Currently, many third-party companies are looking at migrating from just licensing to more of a service-oriented framework. It's actually good for SMEs, because you have a lot more options to orchestrate and integrate them into your own system, he said.

Cloud computing is expected to be a major driving force for the Internet business, and Chinese Web companies are already getting ready to do battle in this new industry.

Baidu Inc and Alibaba Group Holding Ltd have announced their own cloud strategies.

In August, Baidu's 47-billion-yuan cloud-computing center in Yangquan, Shaanxi province, started construction. It was the most expensive cloud-computing project set up by private companies. The center is slated to start operations by 2015 with a total storage capacity in excess of 4,000 petabytes. It is estimated that the normal human brain can store about 2.5 petabytes of binary data.

The nation's most used Web search provider will invest more than 10 billion yuan to set up its own cloud-computing centers, said a recent Reuters report.

Alibaba, an online commerce giant, has developed its own cloud-based operating system in a bid to explore the cloud market for personal use.

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