China's cloud storage market to double each year

The country's cloud storage services sector will double each year over the next five years, with midsize firms as early adopters, says researcher.

China's cloud storage services market will double each year over the next five years, according to Springboard Research's latest findings.

The analyst firm said in a report Thursday cloud storage services in China will grow from US$6.05 million in 2009 to US$208.54 million in 2014. This represents a five-year compound annual growth rate of 103 percent.

The uptrend will be driven by increased usage of cloud storage capacity as the price of storage falls, it said.

Rita Xia, Springboard Greater China associate market analyst, said the first wave of companies will be midsize firms with limited capital outlay for IT investments.

These companies would typically be focusing their investments on their core business, turning to outsourcing storage as a way to avoid high datacenter costs, said Xia.

This initial wave of implementation will be followed by small and large enterprises, attracted by the faster implementation of the utility computing model, she added.

Springboard identified transportation, manufacturing, utilities and the public sector as potential hot verticals for cloud storage. While the public and utilities sector will be pushed by the government to lower maintenance costs, the cloud's appeal for the manufacturing sector lies in its ability to take on the cost and complication of running large data centers in order to support manufacturers, said another analyst with the firm, Gene Cao.

According to Xia, the first wave of IT players getting in on the cloud storage game would naturally be traditional hosting providers, whose first moves would involve repackaging existing hosting services to cloud-friendly plans.

A Savvis executive said last year in an interview that existing data centers can be made ready for the cloud without needing to undergo complete overhauls. He said older generation data centers have sufficient capacity to serve cloud computing needs, but need to be tweaked by availing more cooling resources, for example.

Yahoo has also been readying data centers by modifying its network and installing new equipment in its facilities.

An IDC analyst reported a few months ago demand for cloud computing and a greater usage of outsourcing has kept datacenter demand high even through the economic crisis. He added some companies have also started moving co-location users out of their facilities, in order to make way for cloud users.

Amazon, which provides the market leading EC2 infrastructure-as-a-service (IaaS) platform, came out recently to clarify the difference between its service and the concept of private clouds, referring to infrastructure hosted inhouse. An executive from the company said "true" cloud computing in the hands of a vendor provides the economies of scale and capital expenditure savings of the cloud, while a private cloud is merely a rebranded company-owned data center.


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