Next Generation Data Centers Attach Equal Importance to Income Increase and Expenditure Decrease
-- Review of China’s Next Generation Data Center Market in 2008 and Outlook for 2009
BEIJING, Jan. 9 /PRNewswire-Asia/ -- CCID Consulting, China’s leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), recently released its article on next generation data centers.
With IT increasingly become an inseparable part of enterprise management, traditional data centers no longer fulfil the requirements of a changing management environment, due to difficulties in upgrading new hardware, high operating cost and other functional shortcomings. In the face of the financial crisis, enterprises now pay more attention to the returns on IT investments than ever before. Next generation data centers must provide users with high returns with lower costs, while fulfilling the needs of a ever changing business environment.
Size and Growth of China’s Next Generation Data Center Market
Despite the impact of the global financial crisis, China’s next generation data center market continued to maintain fairly fast growth in 2008. Through its survey and research on data center building in China, CCID Consulting found that driven by the demand for virtualization applications, business integration, centralized management, energy saving and consumption reduction, investment in next generation data centers maintained fast growth. In 2008, the total investment reached 32.675 billion Yuan, up by 24.6% year-on-year.
Fig. 1: Size and Growth of China’s Next Generation Data Center Market in 2008
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Source: CCID Consulting, December 2008
The rapid growth of China’s next generation data center market over the past years is closely related to the fast-growing information system building in the country and the deepening IT applications in enterprises. To sum up, the main driving forces are as follows:
Firstly, fast market growth has mainly benefited from the concentrated reconstruction and new projects in the telecom industry, the building of disaster recovery centers in the financial service industry and the renewal and reconstruction of traditional data centers. Meanwhile, major events such as the Beijing Olympic Games, Shanghai World Expo and Guangzhou Asian Games have actively promoted various localities to invest into data center building. In the next few years, such influences will continue.
Secondly, as enterprises deepen their resources integration and centralized management, the demand for data center reconstruction and expansion has risen. Companies are now turning to data centers for lower operating costs, centralized management and safer operation.
Thirdly, technological innovations have pushed forward the fast development of next generation data centers in China. Various new technologies have emerged in an endless stream, i.e., blade systems, multi-core technology, virtualization applications, cooling technology and smart management software. All these technologies have produced a major impact on the application and management of traditional data centers. On the other hand, enterprises’ business models have also changed greatly. Enterprises urgently need to build next generation data centers to adapt to such changes. It is in this context that China’s next generation data center market has entered a fast-growth stage.
Characteristics of Next Generation Data Center Building and Its Operational Status in China
Hardware accounts for a rather high percentage of investment. Investment in next generation data center products mainly includes three parts: IT investment, machine room equipment and consulting services. CCID Consulting’s data show that in 2008, IT accounted for the biggest part of investment among the three parts, reaching 70%, while server procurement accounted for 50% of the IT investment. This shows that next generation data center building in China is still in its initial stage, with hardware accounting for a rather high percentage of investment. Professional consulting services accounted for less than 4% of the IT investment, which shows that users lack overall early planning for their data center building and have yet to improve their understanding of consulting services.
The telecom and financial service industries make up over half of the market. In terms of industry structure, next generation data center building in the telecom and financial service industries started rather early with large investment, and applications are relatively mature. Currently, the investment in these two industries accounts for over 50% of the total.
The industry still face a lot of challenges. Currently, business concentration, data concentration, complicated management and high continuity requirements have become the common features of data center building. As the demand for centralized data management in various industries rises and business models continue to reform, there will be an urgent need for enterprises to integrate their businesses through technological innovations and to build next generation data centers.
Development Trend of Next Generation Data Centers in China
Despite the many challenges, CCID Consulting believes that the next generation data center market will continue to maintain a fairly fast growth momentum in the future. Firstly, despite a slowdown in China’s macro economy, the overall economic situation is nevertheless in good shape. As the government’s successive introduction of related measures to cope with the financial crisis and the implementation of the four-trillion-yuan economic stimulus package, the investment of over 10 trillion Yuan will be driven up in localities. Such large-scale investment is bound to push up IT inputs. This will undoubtedly play a tremendous role in promoting the development of China’s next generation data center market. Secondly, enterprises now face a series of problems that traditional data centers fail to resolve, and are eager to switch to new data centers. There will be various increases in new, expanded and reconstruction projects, and future investment will remain high. Thirdly, next generation data centers in China are in a period of fast growth. Projects construction also requires a certain cycle, and thus has a strong ability to withstand market fluctuations and risks. Fourthly, data center vendors are now stepping up efforts to promote new technologies and products, and continue to introduce all kinds of total solutions that suit the characteristics of applications in various industries. The gradual deepening of the concepts of energy-saving, secure and intelligent management and the closer cooperation between vendors and between vendors and users also lay a foundation for the healthy development of the data center industry in the future.
Fig. 2: Forecast for Size and Growth of China’s Next Generation Data Center Market, 2009-2011
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Source: CCID Consulting, December 2008
Looking into the future of China’s next generation data center market, CCID Consulting believes that driven by the large-scale infrastructure investment, and under preparation of major world events such as Shanghai World Expo and the Guangzhou Asian Games, demands for IT applications in such key sectors, including government, telecom, financial services and energy will continue to be strong in the next few years. Next generation data centers that are low in maintenance costs and induce quick returns are bound to become a major highlight in the IT market.
About CCID Consulting
CCID Consulting Co., Ltd. (hereinafter known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: 8235.HK), is directly affiliated with China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Wuhan and Chengdu, with over 300 professional consultants after many years of development. The company’s business scope has covered over 200 large and medium-sized cities in China.
Based on major areas of competitiveness: industrial resources, information technology and data channels, CCID Consulting provides customers with public policy establishment, industry competitiveness upgrading, development strategy and planning, marketing strategy and research, HR management, IT programming and management. CCID Consulting’s customers range from industrial users in electronics, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks. CCID Consulting commits itself to becoming the No. 1 advisor for enterprise management, the No. 1 consultancy for government decisions and the No. 1 brand for informatization consulting.
