Movie or TV programme that featured a Data Center

Published 2 September 2016

I intend to write less business-like post before the weekend about a month ago. So here is this week’s contribution which is about how data center are being presented in movies or TV series.

Halt and Catch Fire is a popular AMC programme that fictionalized how tech start-ups were like in the 1980s. The show got me piqued when it featured a data center in one of the episode 3 in season 2 and a data center I worked back in 1995 looked almost the same with shelves for manuals and folders in the same data center space, cabinet size tape machines humming along. It is quite a realistic depiction of data center back then in the period of 1980s as per the timeline of the episode.

However, I also watched the pilot episode of Scorpion (about a team of geniuses) that has a very bad depiction of data center. A data center building entrance door is a roller-shuttle style door and protected by a lock that can be disabled when the neighbourhood power cabinet was shutdown. Hmm, shouldn’t any electronics on premises be protected by UPS or battery-powered? When the team enters the data center room, lo-and-behold two rows of racks are there with gaps between every rack and its neighbour. Now who would place racks in this manner? Perhaps they are short of budget and couldn’t find sufficient IT racks. Sigh. And the team enter a caged area where the door has no electronic lock of any kind? Now the worst part of the show about IT is that they are trying to locate a file and somehow they identified a particular hard disk to contain that file in a NAS appliance that houses 14 hard disks. Now we should know better that usually hard disks are configured in a RAID array and data from a file will be split across the hard disks in fixed-size fragments with duplicated checksum so that it can be rebuilt should any of the hard disk fails.

Slightly off angle from data center field are TV series like HBO’s Silicon Valley, CSI:Cyber (about cybercrime) and Mr Robot (hacking). In one of the episode of Mr Robot in season 1, Mr Robot sits in the Steal Mountain (phew, a play of the name Iron Mountain which do have data center business) which is pretty authentic and most likely filmed in an actual data center.

If anybody remember a movie called SwordFish, it features a programmer’s workstation with 7 computer screens, now tell me who program with 7 computer screens? The Terminator movie Terminator: Genisys has a pretty futuristic depiction of a data center that has time travelling machine right in the middle. Hmm, well artistic license. And the most entertaining (and still remembered by many people) is the scene whereby Tom Cruise hangs in the air when trying to steal data from CIA computer room.

By the way, lots of live TV programmes, movies are delivered over the network through cloud network (Netflix sits on Amazon Web Services), content delivery network (CDN) and data centers and companies like Akamai, ChinaNetCenter and others have grown on the back of image/file/video caching. And product placement by technology company like Huawei, Cisco, Apple are common these days. But I digressed.

I like Sneakers (hacking including social hacking) and there is interesting scenes of stealing the voice print, retinal image and fingerprint of a computer scientist to enter a secured room. The Terminator:The Sarah Connor Chronicles series has some scene of computer company and servers, I seem to recall it was not too glaringly wrong or something like that. Live Free or DieHard (2007) has a pretty cool mobile containerized data center cum operations center which I was impressed.

Now which movie or TV programme I will like to watch during this weekend, perhaps one that features a data center or a computer? 2001:A Space Odyssey (1968) or Transcendence (it featured a underground data center, 2014). I may watch both of them anyway.

Reference:

  1. http://www.datacenterknowledge.com/archives/2014/10/31/from-hals-brain-room-to-johnny-depps-california-data-center-the-evolution-of-data-centers-in-movies/
  2. http://www.datacenterknowledge.com/archives/2016/06/21/data-centers-offer-hbos-silicon-valley-much-laugh/
  3. http://www.cio.com/article/2378430/data-center/5-data-center-gaffes-in-popular-hollywood-movies.html
  4. http://www.datacenterjournal.com/data-centers-play-film-broadcast-industry/
  5. http://www.computerworld.com/article/2489741/networking/how-netflix-streams-movies-to-your-tv.html
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Movie or TV programme that featured a Data Center

Foreign Data Center Players in China

Published 29 August 2016

This is the sixth post in the series of posts on the China Data center market. You can find the earlier post to this series on linkedin under my posts or via https://newwitblog.wordpress.com/

  1. Background

China is a restricted market for telecommunications services that is closely related to the data center market. Internet Data Center (“IDC”) license is a category under the telecommunications regulations under the control of the China Ministry of Industry and Information Technology (“MIIT”).

Foreign Data center players do participate in the China Data center market, but there are some misconceptions of how these data center players can get into the market such as do they have exceptional privilege through some special relationships.

The apparently handful of foreign data center players that are in the China Data center market appears to support the above impression. We hear about names such as NTT, Equinix (establish presence in China in 2014 through buying AsiaTone), and PacNet. The absence of Digital Realty and foreign third party wholesale co-location service provider seem to further enhance the impression that only some special ones get to participate in the China Data center market. This is largely not true.

We tend to look for foreign data center giants like DRT, Equinix and then have an impression that China do not have a presence or are not welcoming foreign data center players. This post will hopefully help to dispel some myths and provide some insights to you.

 

  1. Truths or myths

There are some long held beliefs regarding whether foreign data center player can participate in the China Data center market. While some are true, and there are some that are purely outdated or misinterpretation. Some of the often talked about points about foreign data center participation in the data center market are:

  1. China do not welcome foreign data center player
  2. China allow foreign data center player, subject to 50% foreign ownership
  3. If a foreign data center player is in China or is talking about building data center in China, they must have special relationship with the government officials (it implies that they either somehow have an IDC license that is normally not allowed)
  4. There is not much presence of foreign data center player, only PacNet and Equinix are there
  5. Owning and operating a data center in China is very risky for a foreign data center company, because you are violating the rules
  6. The local police (Public Security Bureau – 公安) will enter your premises and take away data (hard drive) without any warning

Let us get the first three points above out of the way with reference to the picture below.

China do allow foreign company that build data center building with mechanical and electrical infrastructure, or more generally those Data center REIT player or third party wholesale colocation service provider that do not provide ISP connectivity or IT hardware (note: from 2015 onwards, colocation service provider that lease IT hardware or provide cloud service to customer are required to apply for an IDC license).

China also allow a joint venture company, with Hong Kong or Macau based company holding up to 50% of the shareholdings while Chinese shareholders holding at least 50%, to apply for an IDC license.

For the time being, China do not allow foreign majority owned company to apply for IDC license.

In all likelihood, the situation of foreign data center player is participating in the China data center market by not getting involved with the network connectivity or providing server leasing or cloud service. Let us hold the presence of Amazon Web Services and Microsoft’s Azure in China till to later part of this topic.

As for the last point, most country’s telecommunications or counter-terrorist act or some regulations that empowers the police to seize data or hard drive. I have not heard of any actual case.

 

  1. Regulation of an Internet Data Center

We talked about local data center player having to apply for an IDC license. It is the same for a joint-venture data center company that has any shareholder from Hong Kong/Macau and within the prescribed 50% shareholding limit. They can do the following:

  1. Apply for a nation-wide license with the Ministry of Industry, Telecommunications and Industry (“MITI”). The licensee still has to register their awarded nation-wide license with each city’s Communications Administration that they intend to have a data center facility. So having a nation-wide license doesn’t automatically mean you can build your IDC anywhere. This is the confusing part, besides it may be an obstacle to foreign data center player which intend to abide by the written rule to apply through a 50-50 joint venture with a local partner for the nation-wide license which may not be granted in the first place beside being within the rule and still get rejected even if they somehow managed to get a nation-wide license with their registration in the city that they intend to have a data center.
  2. Apply for a provincial wide IDC license with that particular province’s Communications Administration and do so for each city. The licensee still has to register their awarded nation-wide license with each city’s Communications Administration bureau that they intend to have a data center facility.
  3. Apply for a city specific IDC license with that particular city’s Communications Administration and do so for each city.

Usually, there is not much of an issue for a local Chinese company to apply for and receive their license. In 2014, The MIIT ministry issued a document (http://www.miit.gov.cn/n1146285/n1146352/n3054355/n3057709/n3057717/c3651787/part/3651788.doc ), this document is significant as it contain a statement

   申请经营IDC业务的企业,应利用自有或租用的机房和场地,以外包出租的方式为用户的服务器等互联网相关设备提供放置

   代理维护、系统配置及管理服务,以及提供数据库系统或服务器等设备的出租以及存储空间的出租、通信线路和出口带宽的代理租用和其他应用服务。

In English it meant an IDC license is required should the data center service provider provides colocation space for client to collocate the client’s IT equipment, or if the cloud service provider provide compute and data storage resource.

AWS and Microsoft Azure cannot officially front and provide their cloud service, and instead have to rely on their China partners (AWS is with SINNet, and Microsoft Azure is partnering 21ViaNet) to provide their cloud services.

 

  1. List of Foreign Data Center Player in China

From what we have learned, there are about twenty and possibly more foreign data center players that are in the China Data center Market. In our case, foreign is defined as not from mainland China so Hong Kong is counted as outside of mainland China given that the regulations treats Hong Kong or Macau registered companies as a separate group of companies from the mainland China companies. A list of some of these foreign data center players are listed as below:

  1. AsiaTone
  2. CITIC Telecom CPC
  3. DXYNet
  4. Hong Kong TownGas
  5. Hong Kong New World Telecom
  6. PCCW (Guangzhou)
  7. Equinix (through purchase of AsiaTone’s China data centers)
  8. Fujitsu
  9. KDDI Telehouse
  10. NTT
  11. British Telecom (partner with 21ViaNet), http://www.china.org.cn/english/BAT/28362.htm
  12. AT&T (through Shanghai Symphony Telecom, 25% holdings, a joint venture with China telecom),
  13. CloudSite (Tianjin)
  14. CenturyLink (sits within GDS) through Neusoft
  15. STTelemedia (through investment into GDS)
  16. Telstra/Pacnet
  17. Foxconn
  18. HP (reduced its shares in H3C-华三通信网络, selling 51% to Sugon)
  19. TIS-Hitech Tianjin (Japan’s TIS)
  20. SinoCloud (Guiyang, 4,800 racks capacity) (SinoCloud is previously called Armarda Group, an listed entity on the Catalist board of Singapore Stock Exchange)

AsiaTone had sold six of its data centers in China and Hong Kong to Equinix back in 2012, AsiaTone is still building new data centers in China, including Shenzhen, Shanghai’s WaiGaoQiao area, and Nantong city in JiangSu province.

IBM had sold of Tianjin BlueTek (a data center service provider) to TeamSun. If not, IBM would be on the above list.

There are a lot more announcement of possible new entrants into the China data center market such as Charoya, Hitachi Data Systems, South Korea’s SK Broadband, Digital Realty, and AirTrunk intention to build new data center in China.

Temasek Holdings, owns 13.1 per cent of 21Vianet, with 5.8 per cent voting power for its $74 million investment in the data centre company. For the Singapore wealth fund, this marks a second major investment into the 21Vianet. Last year, Temasek had invested $100 million to buy around 10 per cent of NASDAQ-listed 21Vianet.

There are a number of private equity funds that operates in China and Hong Kong that has China data center buildings in their portfolio of assets. For example, Cybenaut Investment Group is started and based in China, it is open to foreign funds for investment. Cybernuat has data center investements in ZhongWei city of NingXia province, and GuiYang of GuiZhou province.

 

  1. Various Options for Foreign Data Center Player to enter the China Data Center market

Generally, there are various options for a foreign data center company to go into the China Data Center market:

  1. Focus on only the building and M&E infrastructure

This is the problem-free option. It is still not completely easy going forward as there can be problems in getting land, power, and sales going but it is the least difficult option amongst the options. This is also where the local large enterprises can and do compete in plus they have less of a problem to go upstream, meaning they can get an IDC license and package the whole data center suite/rack + connectivity and makes it easier for the client. Plus land plot allocation is usually quite sizable in China, and therefore the investment and capacity will be quite huge.

  1. Partner with a local partner that has IDC license

Most of the foreign data center company operate using this mode. There is slightly different variations in using this model of operating in China, depending on what the local IDC and foreign data center are looking for in this type of partnership and what their plans are going forward. More on this in the next section of this post.

  1. Establish Hong Kong / Macau entity to go into joint-venture with a China company, and apply for a IDC license

So far, mainly the Hong Kong based companies like HKT, Hong Kong TownGas went about through this mode. PacNet (now owned by Telstra) previously go by this way to have their Hong Kong entity register a China JV called PacNet Business Systems that they own 50% with the other half by a China state-owned enterprise, which is how they get the country-wide IDC license. It is still likely to continue to operate in this manner after Telstra has bought PacNet.

  1. Invest into a Chinese Data Center company

This is fairly easy for Chinese Data Center companies which are listed in foreign stock exchange. For the non-listed types, the local Chinese data center company typically will organize itself into two companies (or more, depending on its business model) whereby one of the entity holding an IDC license will be 100% owned by local Chinese shareholders or up to 50% by Hong Kong or Macau but this has to be pre-approved by the government ministry.

I have had discussions with foreign data center companies that are exploring options and partnership opportunities with potential local Chinese data center companies. It is a fairly involved process just on business compatibility itself.

  1. Points to consider for a Data Center company

There are some important points to be aware of about the China data center market.

  1. Location

This is not about site selection. China is a large market and the data center market is not a single homogenous market. Beijing, Shanghai, GuangZhou/ShenZhen, ChengDu/ChongQinq and other up and coming regions such as the designated cloud development zones are sub-markets to consider. And government support (lower taxes) or restrictions (such as Beijing city discouraging new data center build unless it is cloud data center with PUE less than 1.5) are points to consider.

  1. Policy

Different regional/district/county government will have different incentives to attract new data center development. Beijing and Shanghai are not so welcoming to new data center development while districts in neightbouring provinces like LangFang and KunShan will be more welcoming in terms of possibilities of tax incentives and land allocation.

  1. Competition

The major data center hubs in China are high competitive. The dominant telco carriers’ data centers generally are doing well while China Telecom or China Unicom fair better in Shanghai or Beijing respectively and their pricing is used for baseline for the mid to low end of the co-location and hosting business. In general, wholesale co-location data center service segment is relatively new in China, with Range International (LangFang), Cybernaut’s ZhongWei project, and those cloud development zones/parks coming up in various parts of China dominated by the large Chinese state-owned enterprises (e.g. AtHub at ZhangBei, China telecom in Inner Mongolia and GuiYang) and potentially Charoya, it is interesting to see if this sort of scale will be a major trend in China.

  1. Network

Network connectivity is very important for a data center. While a wholesale co-location data center service providers and the data center REIT players do not play on the upper layer on the co-location hosting stack, their customers do care that they can easily get the network connectivity that they will need. In this aspect, the right partner will have a fatter sales pipelines and in some cases cost advantages compared to others and this is an area that requires greater scrutiny and analysis.

  1. Why a Local IDC Goes into Partnership with a Foreign Data Center Player

While partnering with a local IDC company is the most common mode of foreign data center companies entering the China data center market, there are some key points that I learned from both sides.

From the Chinese data center companies, they seek partnership from foreign data center companies in terms of three areas:

  1. Capital injection
  2. Foreign clients
  3. Technical know-how

With capital injection and a pipeline of foreign clients, the local Chinese data center company will greatly reduce risk when come to scale and new data center development. The technical know-how is a rich topic in itself as we heard cases of complaints of service level gap and ability to fully appreciate the needs of MNC clients; suffice to say on the surface that this point on technical know-how involves technical design & implementation, and operational knowledge to meet more stringent SLAs and expectations of foreign clients which ties in with point 2 above.

For foreign data center companies that have been established for quite a number of years and have a portfolio of Fortune 500 customers, the consideration for partnership with local data center company can be quite different depending on which layer of the market they focus on. Below are some of the points to consider:

  1. Financial risk
  2. Long term strategy
  3. Local demand
  4. Access to the IDC license

The financial risk can be capital required, repatriation of profits, profit margin required, ownership/control etc.

The ambition and long term goals of both foreign and local partners have to be roughly aligned. There is no point for a large Chinese state-owned enterprise to go into partnership with a well-known foreign cloud service provider if the local Chinese partner also have a cloud service to offer. However, if the foreign data center company has had the full stack of data center services from cloud service (refer to diagram in earlier part of this post) to telecommunications services and then to pure co-location space leasing, then it will need to cut down its suite of services to pure co-location space leasing. It will also be a problem if the state-owned enterprise is “forced” to list on local bourse while the foreign partner looks to list outside of China. It is better to find out each other’s ambitions early on.

The foreign data center company will want a certain commitment to capacity when considering the investment or a new data center build which can be a sticky point. Last but not least, be it for potential client demand or norm, access to network connectivity via a partner or channel that has IDC license will affect the confidence in the joint venture. If the demand is driven from the foreign data center company’s portfolio of clients, then it is a strong push although there rarely do such case come up because most if not all foreign clients of the foreign data center company would have already been using local data center services in China or Hong Kong, and at most has incremental demand rather than demand for big new capacity.

The issue of IDC license will need to be dealt with in each city that the joint venture plans to build data center, even if the joint venture is will only focus on wholesale co-location service as the local authority may only grant land for leasing if it comes under the cloud data center development headline as part of the local government KPI (cloud data center is required to be licensed under the Chinese government regulations).

Surprisingly there are plenty of local candidates for partner. It is however fairly cumbersome to find out their strengths and ambitions. The previous posts on local Chinese data center companies is one source, another would be list of large well-funded state-owned enterprises that has sizable internal demand and wants to build on it to move into the smart city sector or cloud service sector as the prior requires strong local knowledge and relationship while the second is a controlled and licensed sector.

There are some successful examples of partnerships between local Chinese and foreign data center companies, such as NTT with SDS, KDDi with SDS, KDDi with SINNet. Cloud companies Amazon with SINNet and Microsoft with 21Vianet for its Azure services. There are some examples of partnership by foreign data center companies with local government-owned companies which meant they are tied to each local government’s jurisdiction such as the case of CloudSite joint-venture with Tianjin economic zone’s subsidiary.

  1. Summary

The China Data Center market is not the forbidden city and even the forbidden cities has doors for entering and exiting the palace. There has been proven cases of foreign data center companies that participate in China and it is more than a handful of foreign companies. China companies like Alibaba, Tencent, 21ViaNet have came out of China have started building data centers in Singapore, Middle East, Europe and US.

While Hong Kong has been considered the gateway for data and network for China, data center companies have thrives in the China data center market as the internal demand is greater than China network traffic that goes through Hong Kong. The China Data Center market is part of the global data center market that should be looked at in depth and a strategic market in Asia Pacific region.

Reference:

  1. http://www.chinaz.com/news/2012/1130/284226.shtml
  2. http://www.slideshare.net/tgrhm/datacenter-and-cloud-developments-and-challenges-in-china
  3. http://www.chinalawinsight.com/2013/11/articles/corporate/mergers-acquisitions/%E5%A4%96%E5%9B%BD%E4%BA%91%E8%AE%A1%E7%AE%97%E6%9C%8D%E5%8A%A1%E6%8F%90%E4%BE%9B%E5%95%86%E5%9C%A8%E4%B8%AD%E5%9B%BD%E9%9D%A2%E4%B8%B4%E7%9A%84%E4%B8%BB%E8%A6%81%E7%94%B5%E4%BF%A1%E7%9B%91%E7%AE%A1/
  4. http://www.zwezx.com/a/idc/yunjisuan/2016/0405/6454.html
  5. http://www.lunwenstudy.com/mba/mbascyx/52650.html
  6. http://infopub.sgx.com/Apps?A=COW_CorpAnnouncement_Content&B=AnnouncementLast12Months&F=RWRAW9T6VQN6IO55&H=c8bc90272801af5cb2ddda1de7a9d458e0ed2f10998dcbc8b6dfb32182a80078&fileId=SinoCloud%20-%20Press%20Release%20-%2023%20March%202016%20SCG%20v3.pdf
  7. http://www.ejinsight.com/20140214_views_data-center/
  8. http://www.datacenterdynamics.com/content-tracks/colo-cloud/equinix-signs-up-datang-telecom-as-a-channel-partner-in-china/96448.article
  9. http://www.dealstreetasia.com/stories/temasek-kingsoft-xiaomi-invest-296m-in-21vianet-1224/
  10. http://www.compotech.com.cn/cms/a/xinwenxianshang/2016/0826/53370.html
  11. Digital Realty (announced in 2013 to want to invest into China from 2014) – http://www.scmp.com/business/companies/article/1217705/digital-realty-gears-china-investments

 

Foreign Data Center Players in China

China Data Center Market – Foreign Data Center Player – Part 1 of 2

Published 27 August 2016

This is the sixth post in the series of posts on the China Data Center market by me and a colleague. You can find the earlier post to this series on linkedin under my posts or via https://newwitblog.wordpress.com/

  1. Background

China has a growing data center market that has seen double digit growth since 2008.

Foreign Data Center companies are in the China Data Center market, but there are some misconceptions of how these data center players can get into the market such as do they have exceptional privilege through some special relationships.

The apparently handful of foreign data center players that are in the China Data Center market appears to support the above impression. We hear about names such as NTT, Equinix (establish presence in China in 2014 through buying AsiaTone), and PacNet. The absence of Digital Realty and foreign third party wholesale co-location service provider seem to further enhance the impression that only some special ones get to participate in the China Data Center market. This is largely not true.

We tend to look for foreign data center giants like DRT, Equinix and then have an impression that China do not have a presence or are not welcoming foreign data center players. This post will hopefully help to dispel some myths and provide some insights to you.

2. Truths or myths

There are some long held beliefs regarding whether foreign data center player can participate in the China Data Center market. While some are true, and there are some that are purely outdated or misinterpretation. Some of the often talked about points about foreign data center participation in the data center market are:

  1. China do not welcome foreign data center player
  2. China allow foreign data center player, subject to 50% foreign ownership
  3. If a foreign data center player is in China or is talking about building data center in China, they must have special relationship with the government officials (it implies that they either somehow have an IDC license that is normally not allowed)
  4. There is not much presence of foreign data center player, only PacNet and Equinix are there
  5. Owning and operating a data center in China is very risky for a foreign data center company, because you are violating the rules
  6. The local police (Public Security Bureau – 公安) will enter your premises and take away data (hard drive) without any warning

Let us get point 1, 2, and 3 out of the way with reference to the picture below.

China do allow foreign company that build data center building with mechanical and electrical infrastructure, or more generally those Data Center REIT player or third party wholesale colocation service provider that do not provide ISP connectivity or IT hardware (note: from 2015 onwards, co-location service provider that provide IT hardware or cloud service to customer are required to apply for an IDC license).

China also allow a joint venture company, with Hong Kong or Macau based company holding up to 50% of the shareholdings while Chinese shareholders holding at least 50%, to apply for an IDC license.

For the time being, China do not allow foreign majority owned company to apply for IDC license.

In all likelihood, the situation of foreign data center player is participating in the China data center market by not getting involved with the network connectivity or providing server leasing or cloud service. Let us hold the presence of Amazon Web Services and Microsoft’s Azure in China till to later part of this topic.

As for point number 6, most country’s telecommunications or counter-terrorist act or some regulations that empowers the police to seize data or hard drive. I have not heard of any actual case.

3. Regulation of an Internet Data Center

We talked about local data center player having to apply for an IDC license. It is the same for a joint-venture data center company that has any shareholder from Hong Kong/Macau and within the prescribed 50% shareholding limit. They can do the following:

  1. Apply for a nation-wide license with the Ministry of Industry, Telecommunications and Industry (“MITI”). The licensee still has to register their awarded nation-wide license with each city’s Communications Administration that they intend to have a data center facility. So having a nation-wide license doesn’t automatically mean you can build your IDC anywhere. This is the confusing part, besides it may be an obstacle to foreign data center player which intend to abide by the written rule to apply through a 50-50 joint venture with a local partner for the nation-wide license which may not be granted in the first place beside being within the rule and still get rejected even if they somehow managed to get a nation-wide license with their registration in the city that they intend to have a data center.
  2. Apply for a provincial wide IDC license with that particular province’s Communications Administration and do so for each city. The licensee still has to register their awarded nation-wide license with each city’s Communications Administration bureau that they intend to have a data center facility.
  • Apply for a city specific IDC license with that particular city’s Communications Administration and do so for each city.

Generally, there is not much of an issue for a local Chinese company to apply for and receive their license. In 2014, The MIIT ministry issued a document (http://www.miit.gov.cn/n1146285/n1146352/n3054355/n3057709/n3057717/c3651787/part/3651788.doc ), this document is significant as it contain a statement

申请经营IDC业务的企业,应利用自有或租用的机房和场地,以外包出租的方式为用户的服务器等互联网相关设备提供放置

代理维护、系统配置及管理服务,以及提供数据库系统或服务器等设备的出租以及存储空间的出租、通信线路和出口带宽的代理租用和其他应用服务。

In English it meant an IDC license is required should the data center service provider provides colocation space for client to collocate the client’s IT equipment, or if the cloud service provider provide compute and data storage resource.

AWS and Microsoft Azure cannot officially front and provide their cloud service, and instead have to rely on their China partners (AWS is with SINNet, and Microsoft Azure is partnering 21ViaNet) to provide their cloud services.

4. List of Foreign Data Center Player in China

There are more than a dozen foreign data center players that are in the China Data Center Market:

  1. CenturyLink (sits within GDS) through Neusoft
  2. CITIC Telecom CPC
  3. DXYNet (Hong Kong)
  4. Hong Kong TownGas
  5. PCCW (Guangzhou)
  6. British Telecom (partner with 21ViaNet),http://www.china.org.cn/english/BAT/28362.htm
  7. AT&T (through Shanghai Symphony Telecom, 25% holdings, a joint venture with China telecom),
  8. Equinix (through purchase of AsiaTone’s China data centers)
  9. Fujitsu
  10. KDDI-Telehouse
  11. NTT
  12. STTelemedia (through investment into GDS)
  13. Telstra/Pacnet
  14. Foxconn
  15. HP (reduced its shares in H3C-华三通信网络, selling 51% to Sugon)
  16. Japan’s TIS, TIS-Hitech 天津提爱斯海泰信息系统有限公司 (Japan’s TIS)http://www.tis-hitech.com/index.html
  17. SinoCloud (Guiyang, 4,800 racks capacity) (SinoCloud is previously called Armarda Group, an listed entity on the Catalist board of Singapore Stock Exchange)

IBM had sold of Tianjin BlueTek (a data center service provider) to TeamSun. If not, IBM would be on the above list.

There are others that are in various stages of planning to build or are studying to go into China such as Charoya. Digital Realty (announced in 2013 to want to invest into China from 2014) – http://www.scmp.com/business/companies/article/1217705/digital-realty-gears-china-investments

Temasek Holdings, owns 13.1 per cent of 21Vianet, with 5.8 per cent voting power for its $74 million investment in the data centre company. For the Singapore wealth fund, this marks a second major investment into the 21Vianet. Last year, Temasek had invested $100 million to buy around 10 per cent of NASDAQ-listed 21Vianet.

I am fairly certain that there are more foreign data center companies that are operating in China that I do not know of. The above list may not be accurate.

5. Various Options for Foreign Data Center Player

Generally, there are various options for a foreign data center company to go into the China Data Center market:

  1. Focus on owning the building and M&E infrastructure, and sell the data center space through local channel or partner

This is the problem free way. However, it is not easy more in the sense that land plot allocation is usually quite sizable in China, and therefore the investment and capacity will be quite huge.

  1. Partner with a local partner that has IDC license

Most of the foreign data center company establish their presence and operate using this mode.

  1. Establish Hong Kong / Macau entity to go into joint-venture with a China company, and apply for a IDC license

So far, mainly the Hong Kong based companies like HKT, Hong Kong TownGas went about through this mode.

  1. Invest into the local Chinese Data Center company

This is fairly easy for 21Vianet which is listed in foreign stock exchange. However, the local Chinese data center company will need to split its IDC license holding entity with the data center asset because the IDC license holding entity is not allowed to be foreign owned (except up to 50% by Hong Kong or Macau, but it any change has to be pre-approved).

Part 2 to be continued.

Reference:

  1. http://www.chinaz.com/news/2012/1130/284226.shtml
  2. http://www.slideshare.net/tgrhm/datacenter-and-cloud-developments-and-challenges-in-china
  3. http://www.chinalawinsight.com/2013/11/articles/corporate/mergers-acquisitions/%E5%A4%96%E5%9B%BD%E4%BA%91%E8%AE%A1%E7%AE%97%E6%9C%8D%E5%8A%A1%E6%8F%90%E4%BE%9B%E5%95%86%E5%9C%A8%E4%B8%AD%E5%9B%BD%E9%9D%A2%E4%B8%B4%E7%9A%84%E4%B8%BB%E8%A6%81%E7%94%B5%E4%BF%A1%E7%9B%91%E7%AE%A1/
  4. http://www.zwezx.com/a/idc/yunjisuan/2016/0405/6454.html
  5. http://www.lunwenstudy.com/mba/mbascyx/52650.html
  6. http://infopub.sgx.com/Apps?A=COW_CorpAnnouncement_Content&B=AnnouncementLast12Months&F=RWRAW9T6VQN6IO55&H=c8bc90272801af5cb2ddda1de7a9d458e0ed2f10998dcbc8b6dfb32182a80078&fileId=SinoCloud%20-%20Press%20Release%20-%2023%20March%202016%20SCG%20v3.pdf
  7. http://www.ejinsight.com/20140214_views_data-center/
  8. http://www.datacenterdynamics.com/content-tracks/colo-cloud/equinix-signs-up-datang-telecom-as-a-channel-partner-in-china/96448.article
  9. http://www.dealstreetasia.com/stories/temasek-kingsoft-xiaomi-invest-296m-in-21vianet-1224/
China Data Center Market – Foreign Data Center Player – Part 1 of 2

China Data Center Market – Local Data Center players – Part 2 of 2

This is the fifth post in the series of posts on the China Data Center market by me and a colleague. You can find the earlier post to this series on linkedin under my posts or via https://newwitblog.wordpress.com/

Please take note that it is sometimes necessary for the sake of continuity of writing a post to repeat content from my earlier posts here. I still encourage you to read the entire series from the start.

This post is the second part of the two-part piece that talks about local China Data Center players. But first, let me talk about how big colocation deals are done and the existence of a group of data center build-own-operate players that are not well known outside of the city/province where they operate.

Where are the co-location hubs?

With the exception of CDN players that will build POP in the big enough cities (say a million people populations, in 2015 there are 122 Chinese cities with more than a million people), big local Chinese firms tend to have their country headquarter in Beijing, while foreign MNCs and big companies that were started in Shanghai or ZheJiang/JiangSu provinces tend to base their headquarter in Shanghai. Guangzhou is one of the earliest Chinese city that trade with the outside world and lots of trading companies are based in GuangZhou and Shenzhen (Shenzhen is the homebase of Tencent that builds the populat social chatting app Wechat and QQ). Beijing, Shanghai and GuangZhou are the major network hubs for China Internet network and incidentally are also the network exchange points for the crucial network connectivity for communications with the outside world. In 2008, eight network hubs were added to the national network backbone (ChengDu, Nanjing, Xi’an, ShenYang, Wuhan). NingXia ZhongWei and Inner Mongolia are special cases whereby all three telcos for certain reasons have extended their fibre network to connect to these places. So, customers like BAT and the likes will more often pick populous cities and coinciding with network hubs for their data centers requirements.

Large state owned enterprises still prefer to build, own and operate their own data centers. However, their subsidiaries outside of their headquarter city, if the requirement is small and do not warrant a dedicated facility management team, will choose to co-locate. However, they favor leasing from the big three telcos.

How are big co-location deals done in China?

The big clients of China data center are Baidu, Alibaba, Tencent (in short, all three are bundled together and called “BAT”), and video content providers (Vku, Youku) and CDN companies NasDaq listed ChinaCache (蓝汛)Shenzhen listed Chinanetcom网宿科技) and  Dnion.

The telcos dominates the market so much so that the BAT goes to them and then the telco refers to their preferred list of data center supplier to recommend to the BAT and the telco fronts the deal on paper and then nearly all the work are done by the selected data center supplier. How these players get to be on the preferred list is another topic, but strong relationship and some other factor comes into play. Nevertheless these players do deliver good enough end product for the data center that the telcos lend their name to.

Currently, smart city is a big thing in China and all sorts of IT solution companies from server manufacturers to cloud service providers are getting involved and the deal usually centred on a new data center facility in those city and sometimes even one per district within a city such as the case in ChongQing. For each city, content distribution network providers like Chinanetcache, ChinaCache, and content providers LeTV are one example of demand that will land in each populous city. They will not be keen to build and operate the data center because their focus is in their CDN / content service.

While it is well known that the two largest state-owned telcos China Telecom (“CT”) and China Unicom (“CU”) have the most of the China Data Center market, whether by number of data centers or rack counts, there are a fair bit of other local Chinese players that exist that plays different roles and positions within the entire data center service provider value chain.

Generally big size deal (1,000 racks and above) is usually done at the highest level between bosses (for example a Senior Director of local Shanghai China Telecom will deal with a local data center builder/operator). Contracts are not required to be publicized and request for proposals are limited to pre-selected group of colocation service providers. CT and CU gets the early signal for the larger deals as the Baidu-Alibaba-Tencent (“BAT”) which require big bandwidth pipe with the best possible bandwidth cost. Let me repeat again because the foreign readers may not appreciate this key difference, the client goes to CT to ask CT to allocate data center build project pipeline to the client and not the other way around whereby the client sends out RFQ that includes CT and asking CT to respond. CT is in a dominant position and so is CU, depending on whether the client is looking for colocation site in the northern half of China or southern half. CM is trying fairly hard to build up their data center network throughout China.

CT or CU do not usually build beyond their office building/complex or their telecom exchange hub unless it is a state sponsored project such as the inner Mongolia Holhot CT Data Center park. How CT or CU work is more or less the same when they have the client demand firmed up, if they don’t have any plan for self-build, they will look at their pre-selected list of data center builder and pick one to carry on the project. The pricing is determined by CT or CU with the client, and then pass on to the selected builder to match the price minus the margin that CT or CU will take. So the deal is officially a CT or CU deal with the client, and CT or CU will sign an agreement with the builder. So it works as:

Client <-> CT / CU <-> Builder/Facility Operator

CT or CU will do quarterly or half-yearly audit of the site, and the client is free to impose to put people on site etc.

So if you see a data center with the external signage saying it’s a CT or a CU data center, it may not be as the builder/operator have a CT or CU contract and runs it on behalf for a CT or CU client. CT or CU is not afraid that the builder cum facility operator will bypass CT or CU to get future deals direct from the client as the client is not going to antagonize CT or CU because the bandwidth and connectivity is the lifeline for the data center and it is controlled in a oligopoly by CT/CU/CM.

China Data Center Players

As mentioned in part 1 of this 2-part posts on local China Data Center players, we will further elaborate on two categories of data center providers:

  • 3rd party Data Center Colocation Service Providers

21ViaNet is the most well known 3rd party data center colocation service provider because it is listed on the on NasDaq, GDS DrPeng, SDS, SINNet are well known within China. DrPeng and SINNet are listed on Shanghai Stock Exchange and Shenzhen Stock Exchange respectively. A large chunk of DrPeng and SINNet’s revenue comes from their ISP side of the business and they have broadband that serves businesses in Beijing, and they seem to only have and want to have data centers in Beijing except where DrPeng do have a data center in Shanghai.

Less well known outside of China are state owned enterprises that invest, build and operate data centers. I will just mention a couple of them here: CIDS (国富瑞), Shanghai Baosight (上海宝信) have a bunch of data center facilities that they built and operate. They have their own sales channel.

Centrin is another well known data center in China, as their Beijing YiZhuang data center captured four of the top five banks (of course all are state owned) and also a good number of financial and insurance institutions. Centrin also have data center facilities in QingDao and KunShan. DataYes does the same for Shanghai financial institutions in Shanghai.

Within this category of 3rd party Data Center colocation service providers is quite a fair bit of data center players that are less known outside of the city that they operate. These players get their business from CT, CU and CM and complements the capacity and build program of these big three telcos. So those CT/CU/CM data centers you sometimes come across, you will need to dig deeper to check if these data center facilities are truly owned and operated by CT/CU/CM, half the time it is not. These players get their business one-to-one or back-to-back from CT/CU/CM. These players, in the early days of the Internet boom within China, lease private suite and rent out per rack unit (1.5inch), per server, per rack and moved on to then build and operate for CT/CU/CM. It is most likely that these players works exclusive with one of the big three telcos. A few examples here: Shanghai HGData, Fountain Data Solution, and city like Beijing and Shanghai has about five to seven of these type of medium size players. There are at least a couple of such players or regional players which are potential partner or investment target such as the AsiaTone data centers that was bought by Equinix in 2012. There are investment into local data center companies by local companies such as Shenzhen listed Sunrise group buying 30% of HGData.

  • Build-own-operate pure play facility provider

A lot of the large data center construction and subsequent electrical and mechanical fit-out (generators, switchboards, UPS, CRAH/CRAC, chillers etc) are funded and project managed by a third party despite it being mentioned that CT or CU builds them say for Tencent / Baidu / Alibaba. This is where well funded companies which are state owned or have government investment comes in.

Companies like Athub, Cybernaut, Farvin, CloudFrame, Chatone and probably there are other well financed companies that do build-own-operate data center facility for their client which includes the like of AWS and Alibaba. These players do not limit where they build their data center and their state owned enterprise status gets them smoother process in dealing with the government for land, power, and water. One other player is called Shenzhen Pioneer Data which is a new player that main build in Shenzhen and so far only for Tencent. Gosun Holding has announced that they will fund and build a data center park in Beijing, whether this will really happen given that Beijing City government since 2014 has been tightly controlling who can build data center facility in Beijing.

It makes sense for cloud service providers to lease building including power and cooling infrastructure from another party while only buying their IT hardware.

These companies will build the building and the M&E but will leave the IT to the client. Generally these providers work on a one-to-one basis, i.e. they have only one client for the entire facility.

Summary

The China Data Center market have three significant geographical regions  – Beijing, Shanghai, Guangzhou /Shenzhen. One promising market is ChongQin/ Chengdu as a whole and also GuiZhou (for its climate to have opportunity to deploy free cooling).

There are big and well known local China Data Center service providers and there are lesser known ones. For example, some cloud companies lease dedicated data center buildings and some like UCloud usually do not have such restrictions.

Some big state owned enterprises are entering the market or considering to enter the market but lack the data center industry know-how (they can get capital) like the case of BaoGang (or called Bao Steel) and MaGang (or called Ma Steel). There are large number of data centers built by such state owned enterprises for their own IT operations use and they are considering to build their own cloud or go into the cloud market. There are growth opportunities in China for data center and cloud services. In the next post which is about foreign data center players in China, I will share on some of these salient points.

What’s in the series on the China Data Center Market

The rest of the series, not necessarily in the order shown, will look at the following topics:

  1. A view on the China Data Center Market – Part 1 of 2
  2. A view on the China Data Center Market – Part 2 of 2
  3. Some special China Data Centers
  4. China Data Center Market – China Data Center players Part 1 of 2
  5. China Data Center Market – China Data Center players Part 2 of 2
  6. China Data Center Construction Eco-system
  7. China Data Center Market – Foreign Data Center Players

Reference:

  1. http://baike.baidu.com/link?url=ifzD9GZe0Nh1GrLeIH80uAAbdWnSO8k2I34VR77qYcCKX_opPRn55IDsLPVui2JxvAySaIofeunY3Hz4Aks9ta
  2. http://www.idcquan.com/Special/idcmap/
  3. http://dcd-group.cn/2015/03/baidus-hexi-international-data-center-project-was-delivered-successfully/
China Data Center Market – Local Data Center players – Part 2 of 2

See a Singapore Data Center without actual visiting one or two or three…

Ok, what I was trying to say with the title is a video or virtual walk-through.

A good friend from the China data center industry visited Singapore last month and only has two days and I did managed to arrange a couple of visits for him to look at data center facilities here to help him make a business decision.

While a video or virtual walk-through will only give a general initial impression of the data center facility. It is a good marketing tool especially to gather attention and build up interest.

Surprisingly, I managed to find videos and/or virtual walk-through of most data center facility in Singapore from Youtube. I have nothing to do with any of the video nor verify or support any claim made within the video (I cringed when one of the video says Tier 3+), so you can find the videos on Youtube/Vimeo as below (arranged alphabetically):

  1. Digital Realty Loyang https://www.youtube.com/watch?v=VZt7lLgoH7w
  2. Equinix SG2 https://www.youtube.com/watch?v=pm5QmvSRpIs, and SG3 https://www.youtube.com/watch?v=AnDz9Clzs8k
  3. IO Singapore (1 minutes from the start of video shows the walk-through of the actual IO data center) https://www.youtube.com/watch?v=fcGuS09mqfI and this https://www.youtube.com/watch?v=WXEud-nGms0
  4. Kingsland https://vimeo.com/139170172
  5. NTT Serangoon NEXCenter https://www.youtube.com/watch?v=EJIPeFg83vc
  6. Singtel DC West https://youtu.be/_WUO9uPdAOY
  7. Tata Tai Seng* https://www.youtube.com/watch?v=7wmtDaaHOYY
  8. Telin 3 in Jurong https://www.youtube.com/watch?v=-9CxVN_sEcI

Given so many data centers had done it, and you can find many other US and European data center walk-through videos online, I think it is safe to say that it is more a norm to put such videos online as an avenue to let potential client find out if you are in the data center market space. Another way is to list on datacentermap website such as http://www.datacentermap.com/.

My view about such videos and virtual walk-through are they serve a purpose of giving you a sense of the data center but nothing beats an actual person giving you a guided tour and answering your queries. Get an in-house data center expert or third party consultant to accompany you on the tour if you are looking for data center co-location for your business IT needs.

On a general video about data centers, my own favourite data center video is not a google or facebook data center video because these data centers are built to suit just those IT companies. So this is one that is my current favourite https://www.youtube.com/watch?v=EYK0KeHG2lk

The one grouse I have with my favorite video though is that (at 1m45s part of the video) one of the rack is shown with castors. I like this video for it being a retrofit that is done well with reasonable use of space, it has both traditional data center space and an IT hall with hot air chimney (the rear door is a full glass door, i.e. not perforated rack doors).

*Note: STTelemedia and Tata announced that STTelemedia will buy 74% of Tata Data Centers. There is no news that the deal has been finalized so currently it is still known as Tata Tai Seng Data Center.

See a Singapore Data Center without actual visiting one or two or three…

China Data Center Market – Local Data Center players – Part 2 of 2

This is the fifth post in the series of posts on the China Data Center market by me and a colleague. You can find the earlier post to this series on linkedin under my posts or via https://newwitblog.wordpress.com/

Please take note that it is sometimes necessary for the sake of continuity of writing a post to repeat content from my earlier posts here. I still encourage you to read the entire series from the start.

This post is the second part of the two-part piece that talks about local China Data Center players.

How are big colocation deals done in China?

The big clients of China data center are Baidu, Alibaba, Tencent (in short, all three are bundled together and called “BAT”), and video content providers (vku, youku) and CDN companies NasDaq listed ChinaCache (蓝汛)Shenzhen listed Chinanetcom网宿科技 and  Dnion.

For all these players, with the exception of CDN players that will build POP in the big enough cities (say a million people populations, in 2015 there are 122 Chinese cities with more than a million people), they tend to build and expand along the network hubs of Beijing, Shanghai and Guangdong. NingXia ZhongWei and Inner Mongolia were added to the national network backbone in 2012 amongst a group of seven.

Large state owned enterprises still prefer to build, own and operate their own data centers. However, their subsidiaries outside of their headquarter city, if the requirement is small and do not warrant a dedicated facility management team, will choose to co-locate. However, they favour leasing from the big three telcos.

The telcos dominates the market so much so that the BAT goes to them and then the telco refers to their preferred list of data center supplier to recommend to the BAT and the telco fronts the deal on paper and then nearly all the work are done by the selected data center supplier.

Currently, smart city is a big thing in China and all sorts of IT solution companies from server manufacturers to cloud service providers are getting involved and the deal usually centred on a new data center facility in those city and sometimes even one per district within a city such as the case in ChongQing. For each city, content distribution network providers like Chinanetcache, ChinaCache, and content providers LeTV are one example of demand that will land in each populous city. They will not be keen to build and operate the data center because their focus is in their CDN / content service.

While it is well known that the two largest state-owned telcos China Telecom (“CT”) and China Unicom (“CU”) have the most of the China Data Center market, whether by number of data centers or rack counts, there are a fair bit of other local Chinese players that exist that plays different roles and positions within the entire data center service provider value chain.

Generally it is usually done at the highest level between two equals, i.e. CEO level. Contracts are not required to be publicized and request for proposals are limited to pre-selected group of colocation service providers. CT and CU gets the early signal for the larger deals as the Baidu-Alibaba-Tencent (“BAT”) which require big bandwidth pipe with the best possible bandwidth cost. Let me repeat again because the foreign readers may not appreciate this key difference, the client goes to CT to ask CT to allocate data center build project pipeline to the client and not the other way around whereby the client sends out RFQ that includes CT and asking CT to respond. CT is in a dominant position and so is CU, depending on whether the client is looking for colocation site in the northern half of China or southern half. CM is trying fairly hard to build up their data center network throughout China.

CT or CU do not usually build beyond their office building/complex or their telecom exchange hub unless it is a state sponsored project such as the inner Mongolia Holhot CT Data Center park. How CT or CU work is more or less the same when they have the client demand firmed up, if they don’t have any plan for self-build, they will look at their pre-selected list of data center builder and pick one to carry on the project. The pricing is determined by CT or CU with the client, and then pass on to the selected builder to match the price minus the margin that CT or CU will take. So the deal is officially a CT or CU deal with the client, and CT or CU will sign an agreement with the builder. So it works in the following manner:

Client <-> CT / CU <-> Builder/Facility Operator.

CT or CU will do quarterly or half-yearly audit of the site, and the client is free to impose to put people on site etc.

So if you see a data center with the external signage saying it’s a CT or a CU data center, it may not be as the builder/operator have a CT or CU contract and runs it on behalf for a CT or CU client. CT or CU is not afraid that the builder cum facility operator will bypass CT or CU to get future deals direct from the client as the client is not going to antagonize CT or CU because the bandwidth and connectivity is the lifeline for the data center and it is controlled in a oligopoly by CT/CU/CM.

 

China Data Center Players

As mentioned in part 1 of this 2-part posts on local China Data Center players, we will further elaborate on two categories of data center providers:

  • 3rd party Data Center Colocation Service Providers

21ViaNet is the most well known 3rd party data center colocation service provider because it is listed on the on NasDaq, GDS DrPeng, SDS, SINNet are well known within China. DrPeng and SINNet are listed on Shanghai Stock Exchange and Shenzhen Stock Exchange respectively. A large chunk of DrPeng and SINNet’s revenue comes from their ISP side of the business and they have broadband that serves businesses in Beijing, and they seem to only have and want to have data centers in Beijing except where DrPeng do have a data center in Shanghai.

Less well known outside of China are state owned enterprises that invest, build and operate data centers. I will just mention a couple of them here: CIDS (国富瑞), Shanghai Baosight (上海宝信) have a bunch of data center facilities that they built and operate. They have their own sales channel.

Centrin is another well known data center in China, as their Beijing YiZhuang data center captured four of the top five banks (of course all are state owned) and also a good number of financial and insurance institutions. Centrin also have data center facilities in QingDao and KunShan. DataYes does the same for Shanghai financial institutions in Shanghai.

Within this category of 3rd party Data Center colocation service providers is quite a fair bit of data center players that are less known outside of the city that they operate. These players get their business from CT, CU and CM and complements the capacity and build program of these big three telcos. So those CT/CU/CM data centers you sometimes come across, you will need to dig deeper to check if these data center facilities are truly owned and operated by CT/CU/CM, half the time it is not. These players get their business one-to-one or back-to-back from CT/CU/CM. These players, in the early days of the Internet boom within China, lease private suite and rent out per rack unit (1.5inch), per server, per rack and moved on to then build and operate for CT/CU/CM. It is most likely that these players works exclusive with one of the big three telcos. A few examples here: Shanghai HGData, Fountain Data Solution, and city like Beijing and Shanghai has about five to seven of these type of medium size players. There are at least a couple of such players or regional players which are potential partner or investment target such as the AsiaTone data centers that was bought by Equinix in 2012. There are investment into local data center companies by local companies such as Shenzhen listed Sunrise group buying 30% of HGData.

  • Build-own-operate pure play facility provider

A lot of the large data center construction and subsequent electrical and mechanical fit-out (generators, switchboards, UPS, CRAH/CRAC, chillers etc) are funded and project managed by a third party despite it being mentioned that CT or CU builds them say for Tencent / Baidu / Alibaba. This is where well funded companies which are state owned or have government investment comes in. Companies like Athub, Cybernaut, Farvin, CloudFrame, Chatone and probably another couple of well financed companies that do build-own-operate data center facility for their client which includes the like of AWS and Alibaba. These players do not limit where they build their data center and their state owned enterprise status gets them smoother process in dealing with the government for land, power, and water. One other player is called Shenzhen Pioneer Data which is a new player that main build in Shenzhen and so far only for Tencent. Gosun Holding has announced that they will fund and build a data center park in Beijing, whether this will really happen given that Beijing City government since 2014 has been tightly controlling who can build data center facility in Beijing.

It makes sense for cloud service providers to lease building including power and cooling infrastructure from another party while only buying their IT hardware.

These companies will build the building and the M&E but will leave the IT to the client. Generally these providers work on a one-to-one basis, i.e. they have only one client for the entire facility.

 

Summary

I consider the China Data Center to have three significant markets and one promising market and several interesting places – Beijing Shanghai Guangzhou/Shenzhen. ChongQin and Chengdu.

There are big and well known local China Data Center service providers and there are lesser known ones. For example, some cloud companies lease dedicated data center buildings and some like UCloud usually do not have such restrictions.

Some big state owned enterprises are entering the market or considering to enter the market but lack the data center industry know-how (they can get capital) like the case of BaoGang (or called Bao Steel) and MaGang (or called Ma Steel). There are large number of data centers built by such state owned enterprises for their own IT operations use and they are considering to build their own cloud or go into the cloud market. There are growth opportunities in China for data center and cloud services. In the next post which is about foreign data center players in China, I will share on some of these salient points.

 

What’s in the series on the China Data Center Market

The rest of the series, not necessarily in the order shown, will look at the following topics:

  1. A view on the China Data Center Market – Part 1 of 2
  2. A view on the China Data Center Market – Part 2 of 2
  3. Some special China Data Centers
  4. China Data Center Market – China Data Center players Part 1 of 2
  5. China Data Center Market – China Data Center players Part 2 of 2
  6. China Data Center Construction Eco-system
  7. China Data Center Market – Foreign Data Center Players

Reference:

  1. http://baike.baidu.com/link?url=ifzD9GZe0Nh1GrLeIH80uAAbdWnSO8k2I34VR77qYcCKX_opPRn55IDsLPVui2JxvAySaIofeunY3Hz4Aks9ta
  2. http://www.idcquan.com/Special/idcmap/
  3. http://dcd-group.cn/2015/03/baidus-hexi-international-data-center-project-was-delivered-successfully/
China Data Center Market – Local Data Center players – Part 2 of 2

Charity Giving – a humbling experience

Published 15 August 2016

In 1989, the famous Project Hope was created by China Youth Development Foundation (CYDF).  CYDF collaborate with China Government youth arm to manage the project and Deng XiaoPing penned down the name in Chinese calligraphy style “希望”, it came after 1988 which China allowed the creation of private charity organizations for specific purpose (China regulates all NGOs and requires registration). China government had so much to do on its proverbial plate that it looks to private individuals and corporations to help fund the building of schools in rural areas in China. China has come a long way and in 2005 the government announced the scheme of education subsidy (“两免一补”) whereby each school going children from poor family (9 years – 6 years of primary school and 3 years of lower secondary school) are not required to pay for text book, school fees and receive an allowance to cover for any school hostel costs. This has lessened the need for Project Hope and CYDF has turned to the software aspect of the schools.

There were controversies with Project Hope, both with CYDF and also the way the money that was supposed to go to build schools were handled by local officials or local officials raising education fund on its own in the name of Project Hope. Nevertheless, it is the only official channel in China to give to education to benefit the poorer regions’ children.

Even after the 2005 measures by the Chinese government to free the financial burden of school going families in rural area, the vastness of China and the reach and speed of getting central and local government help to cover all the rural areas still have a big gap to fill.

Furthermore, some of the local counties are so poor given that most of the adults are working in the richer provinces and thus are not paying local taxes. The families themselves are not in good situations given that the remained behind family members cannot work the farm fully and sometimes children have to help out doing farm and household work that they cannot go to school.

My Experience with Sponsoring a Guanxi boy of 9 years of age

There are many smaller charity organizations and I found one through wechat, and scrutinized their actual set-up. They run charity car boot sale monthly and managed to get a sponsor to let them have a free permanent space to sell members donated goods. They specifically look for a poor mountainous region in Guanxi province to sponsor about 200 primary and lower secondary pupils with the criteria of i) orphan or single parent only, ii) household income below a certain level, and iii) above average results. These children are from 7 to 8 schools in the region and walking to visit the schools, the children in their home with their guardian took the better part of a 11-14 days visit and the charity organization full-time employees (I believe there are two) and sponsors who wants to visit the children they sponsor goes along. The sponsor donate half year worth of money, which is about USD 250, which is disperse to the children’s guardian personal during the half yearly visit, of which one of the visit date is not pre-announced.

I sponsored a then 9 year old child (let’s call him X) for a year and a half. Another sponsor has since took over from mid 2016 from the second half of primary 4 level education need of X.

 

Misconceptions of Sponsors/city folks

The about 200+ sponsors have a wechat group that talks about the charity, the sponsored children, and the school situation. We, the city-born sponsors, given our growing up in cities, are not familiar with the situation in the Guanxi rural area. We have proposed following ideas and ways of helping the children:

  1. Give the school computers
  2. Give the children ipad with 3G data SIM
  3. Give the children phone
  4. Write the children often, like once a week or once a fortnight
  5. Give them books

The ideas were shot down or heavily modified:

  1. Give the school computers – there is no electricity in the school. There is no qualified teacher to teach using computer even if there are electricity.
  2. Give the children ipad with 3G data SIM – there is no cell tower in and around the villages / schools, no electricity in most village homes to charge ipad
  3. Give the children phone – there is no cell tower in and around the villages / schools, no electricity in most village homes to charge ipad
  4. Write the children often, like once a week or once a fortnight. See comment after number 5.
  5. Give them books

The schools are in rural areas, some of them on hills and such and are far from post office. There are no postman in those small nearby towns that has a post office. People in those places go to the post office, no one deliver mail. The post office calls to the village head who passed along the message to the school principal to go into town (which can be a 5-10km walk in non-paved rocky pathway) to collect the mail. Imagine the workload we place on the poor principal who one school principal has worked 20+ years in poor village school from his youth to his 50s has to do to help collect sponsors’ letters. The charity organization moderated the request number 4 and 5 to bring whatever they and hired helpers can carry to each school. They managed to have a winter jacket and a school bag for every of the 200 children. Photos taken of the sponsored children when presented with the items and money together with their guardian.

In early 2015, a family of three older girls and a young boy, of age 7-14 who live with their grandma whereby the father has died in a road accident and the mother is working in GuangDong and hardly has money to travel back to the village for three years, where the eldest is thinking of stopping her lower secondary two studies to go into nearby county town to work and support her siblings to work. When the charity organizer used wechat to ask the sponsor group to sponsor the eldest girl and obliged, the girl is so happy. The girl has graduated this summer and we don’t know yet if she continues onto higher secondary but I believe her sponsors have decided to help her if she wanted to continue her study.

What the above taught me is give what is needed, and give them the help to get them along. The charity organization’s strict criteria of above average results of the children spurs the children to focus on their studies with dual aim of shifting their mind from their current situation while also wanting the children to know that sponsorship that they get is a form of reward for their results, which promotes a good circle of motivate-hardwork-results-motivate.

The Selfless Givers

There are a generations of past and present group of selfless givers and volunteers. They are the principal and teachers in those rural area.

One example is a quiet German, and he said he is just one of the many people from China and other countries that can help. Eckart Löwe went beyond teaching the subjects, he leads as an example and listening to the virtual orphan going about in their daily lives and many of them have grown to be nice adults.

There are other groups that help education in other poorer part of the world, I am not endorsing any but you should investigate further whether they are transparent and meet your expectations. One such well known group is Room to Read.

There are other ways technology can help, one is the solar-powered reading light which is good for the situation given that electricity is hard to come by for the rural villages. Another problem area is clean water which portable water filtration system will help. Last but not least, hopefully mobile data reaches such places and solar powered notepads will help the rural area school children connect to the world of knowledge.

 

Reference (some of these links are in Chinese):

  1. http://edu.people.com.cn/n/2015/1128/c1006-27867112.html
  2. Eckart Löwe – http://english.cri.cn/4406/2010/03/19/1981s557832.htm
  1. http://www.eco-business.com/news/a-light-of-hope-for-chinas-rural-children/

 

Charity Giving – a humbling experience