Cloud & DevOps Market in China:
A Brief Overview
China is a massive internet and mobile-based internet market. China's cloud needs are growing at high speed. Still, the government’s long-standing protectionist policies, foreign cloud service providers face significant challenges competing with Chinese tech giants such as Alibaba Cloud and others. China acts differently when it comes to cloud and DevOps practices. While the whole world embraces AWS, Microsoft, Google for their cloud-related needs, that is not the case when it comes to China, Alibaba seems a clear winner of the most market share followed by Tencent Cloud, Baidu Cloud, and others. Today we will see a brief about China’s cloud and DevOps market.
China’s Cloud Market:
According to research firm IDC, the cloud market in China has tremendous potential and is set to become the largest in the world by 2023. The Alibaba Cloud, Tencent Cloud, and Baidu Cloud complete the majority of the cloud market in China with market shares of 43% (Alibaba Cloud), 17.4% (Tencent Cloud), and 8.7% (Baidu Cloud). While the global market is dominated by Amazon Web Services, Microsoft Azure and Google Cloud, that is not the case in China. China's firms spend less on IT compared to other major IT countries.
China’s cloud market will develop slowly but steadily than cloud markets in Europe and North America because of its own country rules and regulations. When it comes to Artificial Intelligence (AI), the Internet of Things (IoT), Virtual Reality (VR), Online-to-Offline (020) services, Smart Cars, and Online Payments, China is well ahead but somehow the real issue is with the firm's cloud spending and adoption, they don't like it. But the time has arrived where the cloud services are more important than ever and China's young talent is all ready to explore and willing to learn more. We see that startups wanting to experiment with major cloud providers in China now.
In China, over 50% of enterprise wants to go public cloud or hybrid cloud. DevOps has gradually been practiced in China and the adoption is expected to rise in 2020.
We see Alibaba, Tencent, Huawei Cloud doing good in the field of DevOps in the public cloud. AWS and Azure are also getting more attention, slowly but steadily.
There is also some local container platform provider also doing good for DevOps in private cloud, for example, Bocloud
China’s Cloud and IT market characteristics
- Chinese firms spend less on IT and infrastructure. Their main focus is mostly on the hardware part and hence the spending on IT seems more difficult in China.
- China prefers private cloud rather than public cloud. According to the China Council for the Promotion of International Trade, the private cloud market scaled at 52.5 billion yuan, up 23.1 percent year on year, and is expected to grow steadily in the next few years, reaching 117.2 billion yuan by 2022.
- According to the Cloud Computing Open Source Industry Alliance report (China DevOps Status Report 2019), The current penetration rate of agile technology in enterprises is not high, and the rigor of the R&D management process of most enterprises is insufficient.
- The size of the public cloud in China is increasing rapidly (As shown below in the Statista graph). According to market intelligence & research firm IDC, China’s infrastructure-as-a-service (IaaS) public cloud market grew 86.1% year on year to $4.65 billion, accounting for nearly 13% of the global market.
- While the whole world embraces AWS, Microsoft, Google, and other cloud platforms, Alibaba cloud leads in China and has an exceptional growth rate with 47.3% of China’s cloud computing market share.
- According to Zhang Feng, chief engineer at China’s Ministry of Industry and Information Technology, China’s overall cloud industry reached a scale of $48 billion, and the IoT industry surpassed $174 billion in 2018.
- According to a CNCF’s survey done in 2017 between China and the rest of the world around the container adoption, it was evident that Alibaba and OpenStack were leading.
Challenges for implementing DevOps in China
- China tops the list in the category of online freedom for having the least online freedom because of the great firewall of China and government regulations. The problem comes when the companies cannot access their own websites in China, the same goes with any DevOps embracing organization since they cannot easily find their way out to easily sync with other cloud platforms like AWS, Azure, Google, etc
- DevOps, Automation, Cloud Operations, Config Management, Infrastructure-as-Code, Microservices, etc. bring much-needed positive & modern organizational change. Most companies in China still resist all these approaches as too complicated, confining, and slow. Literally, the tools the whole world approves and uses to make things faster are often avoided here. This scenario has made the cloud market a slow-growing one in China.
- The localization theme is pretty strong in China, the worlds best cloud platforms are not famous here. This enforces you to go for local players like Alibaba cloud, Tencent cloud, Baidu cloud, etc
- The great firewall of China limiting access to foreign information sources and hard to deploy software on different cloud platforms is a nightmare. Many of the public registries used around the world are blocked behind the GFW (Great Firewall): DockerHub, GCR, Helm repositories, Quay, and so on, which makes it hard for the software companies to update their software and features on a regular basis. Read more about the challenges & solutions of Running Kubernetes and AWS in China by Omer Hamerman on Medium.
Some tips to enter the cloud market in China,
- Do the integration with top plays with their DevOps platform
- Sponsor more DevOps conferences, events in China to spread the idea of your company
- Try to set up a local connection and an office in China
- Get hold of the Chinese channel partners and enrich relationships with them
- If you go to Google trends and see the trend for the keywords ‘Docker’ and ‘Kubernetes’, you will be surprised to see the trend going on in China, as a contradiction to its own cloud market that is slow in adopting than the rest of the world. What does this mean? This indicates that the search volume is high for these technologies in China and there are firms that are finding a way to use these technologies smoothly without any interruptions, like the great firewall of China.
'Docker' trending in China as shown below, (as per Google trends) 'Kubernetes' trending in China as shown below, (as per Google trends)
How Chinese firms can solve their slow DevOps problems?
China is practically building their own networks, solutions and digital platforms, the whole theme is locally oriented and is focused. The things that affect when it comes to software platforms and usage is OSS usage and licensing, which will be highly affected by the Chinese policies.
If you would like to penetrate China, you need a whole different mindset.
Sharing some points below that might help,
- In China, lots of companies cannot access the internet directly, for example, banks, health care, and insurance companies and even hard to access the Docker images. One of the biggest challenges for global companies with a presence in China is collaborating with Chinese subsidiaries in an efficient way. Collaboration in DevOps is crucial piece, and especially for automation. This means, you need to have a way to efficiently and accurately set a replicate of your assets (source code, binaries, resources) in China, allowing continuous DevOps process over low latency to disconnected network environment. This issue can be solved by building an internal (Maven, NPM, Docker) mirror center for public repos using something like an Artifactory.
- The software companies that are heavily dependent on cloud platforms that offer frequent feature releases and updates tend to slow down because of the inefficient cloud tools. The software updates should be flowing like water and the end to end unified DevOps pipeline can help companies in China solve the software updates problem.
- You need to have a cross-cultural integration between the western world and China world, maintaining setups outside of China and within China. For example, Align Technology has its business all over the world and also in China successfully. The main challenges come when you try to push big Docker images, it just seems impossible and this is where JFrog distribution can help all the software companies that are trying to work with Docker images, consistent and a liable way to access Docker images and artifacts information from the external world to China and also, the JFrog Container Registry is a one way hack to work with related set of container images securely.
- When you have a distributed and remote team that sits at different parts of the world including China, the developers at China will have problems when they want to access the artifacts and collaborate with other developers around the world, and this is where there is an artifact repository management comes into play, something like Artifactory.
The government in China is already actively pushing for the development of the domestic cloud computing industry, and the priority has always been for the local platforms. China’s 'Internet Plus' strategy, introduced in 2015 by the government, promoted the integration of cloud computing, big data, and the internet of things to modernize manufacturing and other domestic industries.
China has the largest online population in the world, it generates an enormous amount of data from different sources that are very valuable, and that must be stored securely. Compared with on-site servers, cloud-based services are more scalable, affordable, and secure, and with modern services, this can be done more efficiently.
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