The "Three Kingdoms" Of The Public Cloud Market In China

The classic work of Chinese historical fiction “Romance Of Three Kingdoms” describes the history of China after the Han dynasty. This work focuses on three power blocks that fought against each other in an attempt to be the dominant kingdom. After my discussions with many users and vendors at the OpenStack Summit 2013, I see an analogy between these three kingdoms and the evolution of the IaaS market in China as I described it in my report “PaaS Market Dynamics In China, 2012 To 2017” early this year.

Three categories of players are emerging in public cloud market in China, and similar to the Three Kingdoms, these players will fight against each other and collaborate at the same time, accelerating both the adoption and the maturing of cloud solutions in Chinese market.

  • State of Shu: Amazon Web Services. The king of Shu was the descendant of Han dynasty before the era of the Three Kingdoms; because of his “royal blood,” he had many supporters and followers to fight against the other two kingdoms.

Amazon.com is in a similar situation: It has very good reputation among architects and developers in China. However, Amazon’s promotion activities are lagging. Amazon is trying to expand its cloud territory into Chinese market by building a data center in Beijing and recruiting local personnel. However, its relationship with the government is not as good as Microsoft’s, and Amazon’s ambition to launch AWS in China has been slowed down due to local regulations.

  • State of Wu: Microsoft Windows Azure and its alliances. The state of Wu is competitive because it has the natural advantage of the Yangtze River, helping it defend against invasion and expand its territory.

Similarly, thanks to its strong relationship with the government and deep understanding of the local culture and environment, Microsoft it the first multinational company that launched its public cloud services (through partner 21ViaNet, based on Windows Azure) in China. The high adoption of Windows, the stickiness of Windows usage, and the seamless integration capabilities of Windows Azure between the private cloud and the public cloud are the natural advantages that Microsoft can rely on.

  • State of Wei: Players that have based their technology structure on OpenStack and other open source technologies. The kingdom of Wei is famous for its open attitude toward and respect for anyone’s talent — even its enemies’ — and that’s why it grew stronger than the other two states and defeated both of them at the end of both the story and the real history.

OpenStack has already built up the most comprehensive ecosystem in Chinese market. From a telecom carrier perspective, all three major players in China are researching OpenStack; and China Telecom may officially adopt the platform. From a cloud service provider perspective, Sina established Weibo, one of the largest social media platforms in China, on OpenStack and provides services to 500 million users. From a developer community perspective, China is now one of the top two countries in the world in terms of contributions to the open source community; Huawei became a gold member of the foundation the day before the summit. Finally, from an end user perspective, Ctrip, the largest online travel agency in China, has adopted OpenStack to support its business operations selling 160,000 flight tickets every day.

I’m not yet predicting that OpenStack will finally defeat the other competitors in cloud market in China as the State of Wei did in the actual history, but it’s gaining momentum. Each player category has its own issues to address. Enterprise architects should reach out to market research and consulting services companies (if they’re not yet familiar with the speed and agility benefits of cloud rather than cost savings or still have concerns about security or privacy), understand these issues, and prepare to embrace the impact of the emerging technology.

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