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China's Local State Cloud Platforms to Have Limited Market Impact, Industry Insiders Says
Lai Shasha | Li Na
DATE:  Aug 30 2021
/ SOURCE:  Yicai
China's Local State Cloud Platforms to Have Limited Market Impact, Industry Insiders Says China's Local State Cloud Platforms to Have Limited Market Impact, Industry Insiders Says

(Yicai Global) Aug. 30 -- Several provincial governments in China are building state-owned assets cloud platforms and have asked state-owned enterprises to move their cloud computing service businesses to these platforms. The move will have a limited impact on China’s existing cloud computing market, according to industry insiders.

SoEs under Tianjin’s municipal government should deploy their cloud computing service business on the state-owned assets cloud platform of the State-owned Assets Supervision and Administration Commission of the city government, per a screenshot of a policy document which started to circulate online on Aug. 27.

If the companies have already deployed their businesses on third-party public cloud platforms, they need to transfer all data to the local authority’s cloud platform within two months from the expiration date of the lease, with the migration to be completed by Sept. 30 next year, in principle.

The SASACs of Zhejiang and Sichuan provinces are also building their own state-owned assets cloud platform services, according to publicly available information.

Third-party public cloud services are cloud computing services supplied by independent providers. These providers include both cloud computing arms of private tech giants such as Huawei Technologies, Alibaba Group Holdings and Tencent Holding and China’s big three telecoms carriers, China Mobile, China Telecom and China Unicom.

Spokespersons for several cloud services firms, including Huawei Cloud and Tencent Cloud, made no comment when asked about the alleged policy document.

Industry insiders told Yicai Global that while the state-owned assets cloud platforms will benefit state-backed cloud service providers, their overall impact on China’s cloud computing market should be limited as the platforms will still need to rely on existing cloud computing vendors for their construction and operation.

No Big Change

With no technical and operational capabilities, state cloud platforms are only a shell and will need third-party providers to supply related technical services, a cloud computing vendor told Yicai Global. As a result, the overall business model of cloud computing services will not be significantly different from before.

“It is definitely good news for state carriers, and we are currently involved in the construction of various state-owned assets cloud platforms,” said a China Unicom employee.

It also remains doubtful whether the platforms will be successfully implemented everywhere. “The impact is not big,” one analyst told Yicai Global. “This is because local governments can influence only a limited number of SoEs, while large central SoEs are less likely to accept the services provided by local government platforms.”

But for the market, the concept of state-owned asset clouds still has a certain symbolic significance. According to another industry insider, the market influence of internet vendors, including Alibaba Cloud and Tencent Cloud, on government and enterprise services may be reduced further, especially against the backdrop of enhanced data security, privacy protection and anti-monopoly.

This will benefit players in the field of basic components, including servers, storage and data centers, especially the vendors that support the infrastructure of state cloud platforms, as well as industry-leading application providers for information innovation business, the source added.

Editors: Tang Shihua, Peter Thomas

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Keywords:   State Owned Cloud,Government Policy,Local Government,Cloud Computing,Industry Analysis