China’s cloud services are expected to balloon in coming years, but U.S. firms like Google, Amazon and Microsoft face tricky decisions about entering the market.
Amazon Web Services (AWS), like other American giants, has struggled to break into China’s large market. It’s partnered with Sinnet to access Chinese clients. Credit: Tony Webster, Creative Commons
Last spring, Google abruptly shut down “Isolated Region,” an initiative aimed at providing cloud services in China and other politically sensitive markets. The decision, which was first reported by Bloomberg, surprised some analysts because it ran counter to Google’s efforts to grow its cloud services globally to compete with Amazon and Microsoft.
But in other ways, Google’s decision made perfect sense. While China’s cloud market is already massive, it is also notoriously hard to break into, since foreign firms operate under strict government oversight and are required to form a joint venture with a Chinese firm.
“It’s a very protected market, so any provider that is trying to make inroads into the China region is required to have some kind of partnership with a China-based provider,” says Sid Nag, vice president in the technology and service provider group at Gartner, the research and advisory company. “That becomes a challenge because they’re not
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