Sun Huifeng, vice president of CCID

Consulting Co., Ltd.

Development & Application Trend of

China‟s Cloud Computing Industry

Industry Development

Contents

Application Trend

Market Opportunities

Definition: cloud computing is a model of service

delivery and use;

Scope: It includes cloud computing services,

cloud computing platforms supporting the

operation of cloud computing service and

technologies related to cloud computing;

Characteristics: resource rent, flexible use,

transparent access, self-service deployment,

open services;

Understanding of Cloud Computing

Strategic Significance of Cloud Computing to China

As the "productive force" in the information society, cloud computing

is an important engine for economic development and social progress.

Key carrier

of N network

integration

Natural

product of IT

application

Significant

direction of IT

evolution

Emphasis of

strategic

emerging

industries

US

In March 2009, Federal Chief

Information Officer (CIO) Vivek Kundra

selected cloud computing to cut

government operation spending;

In December 2009, Federal budget

stepped up financial support for pilot

projects of cloud computing;

In May 2010, the National Institute of

Standards and Technology embarked

research in cloud computing standards;

In November 2010, the Federal CIO

Committee released the Security

Evaluation and Authorization Policy on

the

Adoption of Cloud Computing by

Government Agencies;

….

Europe

FP7 (2007-2013) provides financial

support for multiple projects related to

cloud computing;

Britain released "Digital Britain Report",

calling for the government to step up

efforts at cloud computing;

The EU advised its member nations to

provide incentives for research in cloud

computing and technology development;

Germany released Action Plan for Cloud

Computing;

…

Japan

Under the ICT Hatoyama Plan, it was

put forward that an innovative e-

government should be established with

Kasumigaseki Cloud system;

Japan set up a special zone for cloud

computing in the northeast. With an

investment of 50 billion yen, domestic

and overseas enterprises were pooled

to build a large-scale database;

Report on Cloud Computing & Japan‟s

Competitiveness was released. It was

suggested that Japan should step up

support in IT infrastructure, institution,

and innovation;

…

South Korea

In December 2009, South Korea released

strategic planning on cloud computing,

namely Activated Comprehensive

Planning for Cloud Computing;

In the next five years, South Korea plans

to invest 614.6 billion won (some RMB3.7

billion) to turn the country into the world‟s

No. 1 player of cloud computing by 2014;

Through government procurement, South

Korea supports the development of the

cloud computing industry. IT cost in the

public sector is cut by 50%;

…

Major countries and regions scramble to develop cloud computing

Emphasis of China‟s Strategic Emerging Industries During the 12th Five-year Plan Period

Decision of the State Council on Accelerating Fostering and

Developing New Industries of Strategic Importance (Guo Fa〔2010〕32)

12th Five-Year Plan on National Economic and Social Development

(Fifth Plenum of the 17th Central Committee of the Communist Party

of China)

Notice on Demonstration Work for the Innovative Development of

Cloud Computing Services (Ministry of Industry and Information

Technology, State Development and Reform Commission)

Promote the R&D and demonstrative application of the IoT and cloud

computing;

Emphasis of the new-generation IT industry: new-generation mobile

communication, tri-networks integration, IoT, cloud computing, IC,

new-type display and information services.

Strategic emerging industries

Energy conservation/environm

ental friendliness

New-generation

IT

Biological industry

New energy New-energy automobiles

High-end equipment

manufacturing

New materials

China Work Group for Cloud Computing Standards;

Cloud Computing Committee of China Computer Industry

Association;

Efforts are stepped up to develop the cloud computing industry across China.

No. First members of the China Cloud Computing Base (Center)

Alliance

1 Zhongguancun Software Park

2 Baidu Cloud Computing Center

3 Beijing Lab for Key Cloud Computing Technologies &

Application

4 Cloud Computing Center of Beijing Digital Information

Industry Base

5 Chengdu Cloud Computing Center

6 Innovative Cloud Computing Center (Shenzhen)

7 National Supercomputing Tianjin Center

8 Cloud Computing Base of Harbin Economic & Technological

Development Zone

9 Jilin Public Computing Platform

10 Jinan Cloud Computing Center

11 Pudong Software Park

12 Runze Cloud Storage Industry Harbor

13 Cloud Computing Innovation & Application Demonstration

Base of Suzhou Industrial Park

14 Cloud Computing Center of the Data Industry Park of

Taizhou High-Tech Development Zone

15 Wuxi City Cloud Computing Center

16 Xiexin Demonstration Base for Cloud Computing Technology

Application

17 Cloud Services Industry Base (Wuxi)

18 Cloud Computing Industry Base of Zhenjiang New Area

19 Cloud Computing Technology Innovation and Industry

Incubation Center of the Chinese Academy of Sciences

Harbin

Beijing

Tianjin

Qingdao

Jinan

Nanjing

Wuxi

Shanghai

Hangzhou

Erdos

Chengdu

Chongqing

Guangzhou

Shenzhen

Foshan

Noted IT enterprises are aggressively tapping China‟s cloud computing market

Multinationals Chinese enterprises

Cloud Computing Application Goes Deep in China

Telecom Government Finance Energy Under its Big Cloud project,

China Mobile integrates its

IT resources to support BI

application and provide

services for mobile

Internet;

China Telecom and China

Unicom utilize their IDCs

to transform into IaaS,

PaaS and SaaS service

providers;

Under its BusinessCloud

initiative, Alibaba

integrates and taps its

information resources on

its platforms;

Baidu promotes frame

computing. Tencent and

21vianetalso introduced

their cloud computing

strategies;

...

Beijing launched

"Propitious Cloud" Project;

Shanghai released its

“Cloud Sea Plan", which

covers ten clouds including

medical cloud, education

cloud, health cloud,

transportation cloud and

culture cloud;

Development of

government public service

clouds is underway in

Shenzhen, Foshan,

Chengdu, Nanjing,

Hangzhou and Tianjin;

The Ministry of Health is

exploring cloud computing

application in the fields of

health records, electronic

medical records and public

service information

platform;

...

By building private clouds,

large banks integrate their

current IT systems to meet

business innovation needs;

Small and medium-sized

banks try their hand at

public cloud application, to

deploy IT systems quickly

at low cost to support

business development;

Securities companies

started to deploy corporate

cloud computing

architecture and cloud

computing platforms. A

case in point is Shenyin &

Wangguo Securities;

Third-party service

providers like Centrin Data

Systems and Global Data

Solutions Limited are

aggressively expanding

their cloud computing data

centers.

...

State Grid‟s “power cloud”

program covers power

cloud operating platform,

power cloud distributed

database, power cloud

resource virtualization

management platform and

ten typical applications

based on power cloud

operating platform;

ChemChina established an

IAAS-based data center

platform at its headquarters;

China Southern Power Grid

utilizes cloud computing

technology to deploy

intelligent power

dispatching system;

China Minmetals

Corporation established

PAAS platform based on

EAI architecture.

...

Size of China‟s Cloud Computing Service

Market

Size & Growth of China‟s Cloud Computing

Service Market, 2010-2013

Structure of China‟s Cloud Computing

Service Market in 2010 (100 million yuan)

PaaS0.3

0.2%

Virtualization11.9 7.1%

Cloud security

15.7 9.4%

SaaS18.1

10.8%IaaS121.3 72.5%

Source: CCID Consulting, October 2011

Clo

ud

infra

stru

ctu

re

Clo

ud

pla

tform

&

so

ftwa

re

Clo

ud

inte

gra

tion

& s

erv

ice

C

lou

d u

se

rs

Components Cloud infrastructure

Low-power chips Panels

CPU GPU Flash

memory

Data center equipment

Container

data center Server Storage Network

equipment

Ancillary facilities of

shelter

Cabinets Precision air

conditioning

UPS

Cloud basic software Cloud application

software

Cloud OS Middleware Platform

software

Application

software

Security

management

Data storage Virtualization

Cloud integration Cloud services

Cloud design

consulting

service

Cloud solutions

IaaS

PaaS

Cloud platform

software

Cloud operation

Cloud platform

development

Cloud

integration

service

Network

operation

Data center

System

operation SaaS

Smart phone

Individuals

Tablet PC

Vehicle

terminals

Thin terminal

Cloud TV

Electronic

paper book

IoT sensing terminal

Government

cloud

Enterprises

Financial cloud

Telecom

cloud Transport

cloud

Health cloud

Education

cloud

Tourism

cloud

SME cloud

Monitoring

Understanding of Cloud Computing Industry Chain

Large cloud computing centers entail risks in coordinated deployment on a higher level.

(National planning, including policy guidance, planning and regional distribution)

There is an urgent need to innovate the deployment and operation models of small and

medium-sized cloud computing centers.

(Market positioning, application screening, model innovation, field expansion, business model exploration,

etc.)

Systems supporting the efficient operation of cloud computing centers are weak.

(Core technologies, key equipment, complex application, bandwidth resources, energy consumption

pressure, etc.)

Security issues check the rapid business expansion of cloud computing centers.

(System security, information security, data ownership, security supervision, etc.)

Challenges Faced by China‟s Cloud Computing Industry

Industry Development

Contents

Application Trend

Market Opportunities

Iindividuals and households expand

consumption and entertainment application.

The government and social institutions speed

up the transformation of social management.

Key industries and enterprises go deep into the

integration of industrialization and

informatization.

Three Drivers for Cloud Computing Application in China

Individuals

&

households

Government

&

institutions

Industries &

enterprises

Evolution Trend of Spatial Distribution of Cloud

Computing Bases (Centers) across China

At present, cloud computing

centers are largely distributed in

developed areas;

Informatization foundation and

potential application needs are

major considerations in the

deployment of cloud computing

center;

Driven by cost pressure, on the

whole large cloud computing

centers are moving toward

energy-rich high-latitude areas;

Mongolia

Gansu Shan’xi

Shanxi

Hebei

Beijing

Henan

Hubei Anhui

Sichuan

Chongqing

Hunan

Jiangxi

Tianjin

Shandong

Jiangsu

Zhejiang

Fujian

Guangdong

Taiwan

Heilongjiang

Jilin

Liaoning

Bohai Rim

Pearl River

Delta

Yangtze

River Delta

South C

hin

a Sea

Isla

nd

s

Governmental/

corporate

private

clouds

Industry

public

clouds

Characteristics:

Service providers/users

are not unified

Semi-open management,

open operation

Heterogeneous/complex

systems

Low total cost of

ownership (TCO)

Service diversity

Green IT philosophy

Characteristics:

Service providers/users

are unified

Closed operation, closed

management

Strong system

controllability

High data security

Good service quality

Extending original

business processes

Existing IT investment

Telecom/finance

mixed clouds

Evolution Trend of Cloud Computing Application Model in China

Characteristics:

Service providers/users are partially unified

Closed management, open operation

Serve both in-house staff and external customers

On the mid- and long-term, private clouds and mixed clouds will evolve towards public clouds

Cloud Computing Brings About Changes in Informatization Philosophy in China

Application-centric Data-centric

OA

ERP;

CRM;

PDM;

"Chimney type“: one set of

data for each application

Next-generation health

management;

Next-generation e-

government;

Next-generation intelligent

transportation

Next-generation e-

commerce, etc.

“Flexible type”: building

different application on data

Industry Development

Contents

Application Trend

Market Opportunities

Step 1

- 2010

Step 2

2010-2015

Step 3

2015 -

Technology R&D;

Popularization of concepts;

Attempts at business models;

Ecosystem improves;

Industry application cases increase;

User acceptance improves;

Business innovation based on cloud

application speeds up;

Cloud computing technology grows

mature;

Cloud becomes infrastructure;

XaaS products are highly abundant;

Cloud services penetrate all social

aspects;

Key Phases of China‟s Cloud Computing Market

Development of

cloud computing

infrastructure

Innovation/entrep

reneurship

capital market

Industry cloud

solutions

SME

cloud service

market

Implementation of

demonstration

projects

New Opportunities in China's Cloud Computing Market

New Opportunities in

China's Cloud

Computing Market Cloud

computing-

IoT/mobile

Internet

application

In the past few years, Mr. Sun has led his research team to conduct extensive survey and in-depth

research in key cloud computing technologies, industry chain, value chain, demonstration platform

planning and development, industry application trend, regional development strategy, and layout of

cloud computing infrastructure. Six publications were introduced, including Study of Cloud Computing

Application Market & Model, the Whitepaper on China‟s Cloud Computing Industry, Study of Strategic

Emerging Industries - Cloud Computing, Study of Market Opportunities for Strategic Emerging Industries

- Cloud Computing and the Whitepaper on China‟s Cloud Computing Infrastructure Industry. Mr. Sun

has taken part in a host of cloud computing research projects sponsored by the State Development and

Reform Commission, the Ministry of Industry and Information Technology, and the Counselors„ Office of

the State Council. Mr. Sun has provided training more than 50 times at the invitation of Beijing Economic

and Informatization Commission, Zhabei District of Shanghai, Shenzhen Science, Industry, Trade and

Information Technology Commission, Guangzhou Bureau of Science and Information Technology,

Suzhou Industrial Park, IBM, Microsoft, UFIDA and Inspur.

Typical cases: Research Report on the Development Model of Cloud Computing & China‟s Computer

Industry, Strategic Planning for China‟s Cloud Computing Industry During the 12th Five-year Plan Period,

Study of Beijing‟s Development Strategy for the Cloud Computing Industry, Sinopharm„s Cloud

Infrastructure Planning, Erdos Strategic Planning on the Cloud Computing Industry Cluster Base, 2011

Summit on China‟s Cloud Computing Industry, etc.

CCID Consulting's Research Accumulation -

Cases

Vice president of CCID

Consulting

National certified

consultant

Executive vice secretary-

general of China Cloud

Computing Committee

Microblogging address:

http:

//weibo.com/2162824122&3

CCID Consulting's Research Accumulation -

Publications

Corporate Private

Cloud Application

&

Development Planning

CCID Consulting Co., Ltd.

(Published in October 2011)

Study of Chinese

Demonstration Projects

of Cloud

Computing Application

CCID Consulting Co., Ltd.

(Published in October 2011)

No. Cloud computing-related projects undertaken by CCID Consulting Client

1 Influence of Cloud Computing on China’s Computer Industry Electronic Information Department of the MIIT

2 Study of Beijing’s Planning on Cloud Computing Industry Base Beijing Economic and Informatization Commission

3 Study of Erdos’ Foundation of the Cloud Computing Industry Erdos Economic and Informatization Commission

4 Study of Chongqing’s Strategy for the Cloud Computing Industry Jiangjin District of Chongqing

5 Strategic Planning for China’s Cloud Computing Industry During the 12th Five-

year Plan Period MIIT, Counselors‘ Office of the State Council

6 Study of Zhenjiang’s Strategy for the Cloud Computing Industry Zhenjiang Municipal Government

7 Study of Xinjiang’s Strategy for the Cloud Computing Industry Department of Industry and Information Technology of

Xinjiang Government

8 Study of Suzhou Industrial Park’s Cloud Computing Development Strategy Suzhou Industrial Park Management Committee

9 Jiangsu’s Planning for the Cloud Computing Industry Jiangsu Provincial Economic and Informatization

Commission

10 Chengdu’s Planning for the Cloud Computing Industry Chengdu Hi-Tech Industrial Development Zone

11 China Southern Power Grid’s Cloud Computing Planning China Southern Power Grid

12 Sinopharm‘s Private Cloud Planning Sinopharm

13 Dongguan Electric Power Company’s Planning on Emerging Cloud Computing

Application Dongguan Electric Power Company

14 ... ...

CCID Consulting's Research Accumulation –

A Selected List of Projects

CCID Consulting's Research Accumulation – IT Market

China 2011

CCID Consulting's Research Accumulation - Inauguration

Ceremony for the China Cloud Computing Committee

Zhou Zixue, chief economist with the MIIT, Ni Guangnan, member of the

Chinese Academy of Engineering, Zhao Bo, deputy director of the

Department of Electronic Information of the MIIT, Hou Jianren, head of the

Information and Communications Products of the Department of Electronic

Information, Lu Shan, executive vice president of the China Computer

Industry Association, Xuan Hong, vice general manager of Zhongguancun

Development Group, Zhou Fang, chairman of Zhongguancun Software Park,

Wen Fang, vice president of CCID Consulting Co., Ltd., and more than 200

delegates from more than 30 high-tech parks across China including Beijing,

Shanghai, Tianjin, Chengdu, Shenzhen, Suzhou, Dongguan, Harbin,

Changchun and Wuxi, as well as enterprises in the industry including Inspur,

Baidu, Tencent, Dawning, Lenovo, UIT, Huawei, ZTE, 21vianet, Digital China,

Tsinghua Tongfang, INTEL, SAP, IBM and Microsoft.

CCID Consulting's Research Accumulation - Inauguration

Ceremony for the China Cloud Computing Base (Center) Alliance

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