A Global Connection: Data Center

As an essential carrier of the information age, the data center provides a platform for information data storage and system operation, which is a key resource to promote the development of the new generation of information technology. As more factors of production are generated with the progressof society, data centers are required to support artificial intelligence，telemedicine, and others. At this time, huge information enters data centers to be centralized and saved, which puts forward higher requirements for existing data center facilities. We believe the construction of the deeper data centers has become inevitable.

In the era of mobile Internet, data traffic has become a familiar conception, which has been rapidly popularized in just a few years. In 2019, the average monthly traffic per household of mobile Internet users in China was 7.82GB, 1.69 times that of 2018, meanwhile, the data of enterprises also showed explosive growth. However, less than 2 percent of enterprise data is currently stored and only 10 percent of that is used for data analysis. This shows China has a big gap in the storage and utilization of data. In this context, the importance of big data centers is increasingly prominent. A data center is a platform of data storage, processing, and interaction. During the epidemic of a special period to prevent and control, intelligent application performs a contactless advantage, which has showed a collaborative efficiency in the major events of the digital economy industry in the whole process. The epidemic further enhances the importance of the data center.

Supported by Policies

Data center is not only an important infrastructure, but also a service system and basic support for the development of new industries. In recent years, the state council has issued relevant policies and regulations to promote the development of the IDC industry in China. In August 2017, MIIT issued the notice that the first time included emerging industries such as data center, cloud computing, and industrial Internet into the category of the national new industrial industry to promote the development of the data center industry. In March 2020, the data center is considered into one of the seven fields of new infrastructure construction in the new era, which becomes a catalyst for the development of the data center industry expected to develop rapidly.

IDC Market Space with Large Potential

From the perspective of the global market distribution about IDC, North America still occupies half of the market scale, accounting for 47.7%, followed by the Asia-pacific region which has a greater potential in the view of the growth rate, however. It has exceeded 30 percent for the past three years, among which China, India, and other countries have the greatest impact on the development of global next-generation infrastructure. The IDC market scale in Asia-pacific with 12 billion USD will continue to increase due to the rise of financial centers in the region, such as Shanghai and Singapore. It is estimated that the global market scale of IDC will exceed 130 billion USD in 2020.

Under the environment that the Internet industry in China is developing rapidly, data centers are driven by policy support, technology upgrading, and business model innovation. Data traffic has witnessed explosive growth, which promotes the rapid development of the data center industry. In 2019, the market size of China's data center industry reached 22.6 billion USD, with the industry of clear division of labor, all-round cooperation, differentiated demand and gradually clear division of labor. Compared with the US, the development of cloud computing and the IDC industry in China is just at an early stage with a big gap between supply and demand of the IDC industry. On the whole, the IDC market scale in China will be with huge potential, which is expected to reach 291 billion USD in 2020.

IDC Industry Chain

IDC has a large industry chain, which has counted as a strategic development in China in the past two years. With the continuous improvement and progress of 5G, the Internet of things, cloud computing, and other technologies, as well as the strong support of national policies, the IDC industry chain has ushered in new development opportunities. The upstream infrastructure is mainly for hardware suppliers that build data centers, including IT equipment, power equipment, and etc. And IDC service providers, the main midstream, are the operator data center and the third-party data center to provide IDC integration, operation, and maintenance services. Currently, although a large share is occupied the operator data center such as China Telecom and China Mobile with the explosion of network traffic and the increase of value-added service demand, the third-party data center will develop rapidly.

At present, the three major telecom operators have substantial infrastructure resources in the domestic telecom market, and have obvious bandwidth advantages in the domestic backbone network and Internet international export, accounting for 73% of the market share in the IDC industry. Among them, the market share of China telecom is the highest, accounting for 42 percent. China Unicom was next with 21 percent. In the future, domestic IDC service providers will extend to the upstream and downstream of the industrial chain. Because IDC upstream market pattern is relatively mature, to extend toward the downstream application is in line with the direction of enterprise development.