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China racing to expand data center capacity

China is building data centers at a rapid pace, but it may struggle to become a hub for international business

By Michael Kan, James Niccolai
December 28, 2011 11:58 AM ET

IDG News Service - China is in the midst of an unprecedented data center construction boom that's providing business opportunities for U.S. companies and could see China emerge with one of the most advanced computing infrastructures in the world.

The country is building dozens, maybe hundreds of large data centers to support the needs of its fast-growing online population, estimated now at close to 500 million. The data centers will help to meet escalating demand from telecom providers, and for services such as e-commerce, online banking and e-government.

They will also provide computing infrastructure for overseas firms looking to expand in China. But the uncertain political and regulatory environment make it unlikely that China can turn itself into a hub for international business in the region, to rival countries such as Hong Kong and Singapore.

The build-out is strongly backed by the Chinese government, which has made expanding the national computing infrastructure a part of its latest five-year plan. And local governments are funding the development of vast "cloud cities" -- industrial zones that aim to provide the foundations to support as many as 20 data centers over time.

The boom is providing opportunities for outside firms such as Hewlett-Packard and IBM. "We have more people in China focused on data center development and strategy than, I believe, in any country in the world," said Rick Einhorn, worldwide director for HP's Critical Facilities Services group.

China is heavily reliant today on outside firms for design expertise, he said, although that could change as HP and other firms work alongside Chinese engineers and provide them with training and experience.

The nation's approach to data centers is to build more and to build big, said Glen Yuan, executive of data center services for IBM's Greater China group. The facilities being built for banks and telecom providers are sometimes vast, covering up to 50,000 square meters (538,000 square feet).

China has seen waves of data center construction in the past, but those efforts were often hasty and suffered from poor planning, Einhorn and Yuan both said. Some data centers quickly exhausted their capacity, with the poor infrastructure making services in the country unreliable. This time around, China hopes to do it right.

The Suzhou International Science-Park Data Center (SISDC), in southeastern China, for example, is the country's first Tier 4-certified data center, according to Ivan Lau, a senior sales director with SISDC. Tier 4 signifies the highest level of reliability.

Built with help from IBM, an initial phase opened for business in October 2010, and the data center will cover 42,000 square meters when a second phase is completed in 2013 or 2014. The Suzhou government is funding construction, with hopes of making the industrial park where it is based a major hub for IT services.

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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