DUBLIN--(BUSINESS WIRE)--The "Global and China IDC (Internet Data Center) Market Insight Report, 2021-2025" report has been added to ResearchAndMarkets.com's offering.
With a prosperous outlook for new technologies such as artificial intelligence (AI), big data and cloud computing, which are continually driving the digital transformation of modern businesses, we see a clear trend of data explosion ahead, together with the 5G ongoing deployment. According to Cisco Visual Networking Index, the global IP traffic should reach 396EB/month in 2022E compared to 122EB/month in 2017, recording a 27% CAGR. Meanwhile, the cloud market should continue its strong growing momentum with a clear path of cloud migration. The global cloud market size should reach USD364bn by 2022E, representing a 15% CAGR (according to Gartner) while the China cloud market should see a better growth rate and reach CNY375bn in 2023E, recording a 30% CAGR, according to CAICT. Therefore, we see the strong growth trend of data traffic and promising cloud business outlook pave the way for solid demand growth of IDC (internet data centers) business in the foreseeable future, considering IDC is the fundamental and critical support industry for all of the above.
Companies Mentioned
- Baosight Software
- Shanghai AtHub
- Dr. Peng Telecom
- Chindata Group
- 21Vianet Group
- Beijing Sinnet Technology Co, Ltd
- Kingsoft Cloud Holdings
- Unisplendour Corporation Limited
- Aofei Data
Thanks to the continuing rapid development of the internet and cloud businesses, the China IDC market will likely post a 27% CAGR for 2019-22E, reaching a revenue of CNY320bn in 2022E, according to IDC Quan. While China operators currently remain the dominant players in this market (as China Telecom, China Unicom and China Mobile altogether represented 62% market share in 2019), we see a trend that carrier-neutral players are gradually gaining market shares, as well as increasing their presence and impact to the overall business ecosystem in future, considering their active business expansion and the potential strong demand arising from the market.
Meanwhile, within the IDC business supply chain, we believe equipment vendors could also be the potential beneficiaries of the trend, including server providers (HP, H3C, Inspur, etc.), network equipment suppliers (Huawei, Ericsson,H3C. etc.), optical fiber/module suppliers (YOFC, Hengtong Optic Electric, InnoLight, Accelink, etc.) and power/cooling equipment vendors (ABB, CommScope, Emerson, Schneider Electric, etc.). With potential rapid development of the IDC industry ahead, the cloud service providers, as the downstream of the IDC business, should achieve their long-term business targets smoothly, in our view.
Supply/demand imbalance persists; new infrastructure initiative to trigger another wave of rapid expansion of the IDC market
We have observed that in the global IDC market, business opportunities mainly arise in Tier-1 cities, while in China, majority of the data centers and racks are installed around four cities - namely Beijing, Shanghai, Guangzhou and Shenzhen. However, we continue to see an imbalanced supply/demand situation in the IDC industry. In China, IDC resources in Tier-1 cities have consistently been in short supply for years as a mixed result of limited resources and continuously growing demand.
Furthermore, we believe that energy and land resources have also become the major bottleneck for the IDC business to develop in these areas. While the central government is encouraging green energy in order to reduce air pollution by lowering carbon dioxide emissions, the fact is thermal power still represented 70% of the total power generated in 2019. As a result, we see the IDC business in Tier-1 cities is regulated from various aspects, including PUE (power usage effectiveness) limit, location constraints and size/number target. With such policies likely to continue going forward, we expect business development in Tier-1 cities and surrounding areas should continue to be the key for IDC companies in the future.
Meanwhile, since late 2018, the central government has mentioned that China should focus on building new infrastructure to support innovative business potential over the next few years. According to Xinhua Net, the new infrastructure initiative should include era-defining technologies and relevant infrastructure in seven key areas - as shown in the table below.
Key Topics Covered:
1 Data growth to drive the demand for IDC market
2 IDC resource imbalance persists; new infrastructure initiative should trigger a wave of rapid expansion of IDC business in China
2.1 IDC resource supply and demand is imbalanced in China market
2.2 Latest IDC construction and acquisition trends
3 Different types of IDC businesses
4 IDC market comparison: US vs China
5 IDC Market Demand in China
6 Depth Analysis of Domestic Peers
For more information about this report visit https://www.researchandmarkets.com/r/ahxgg7
