Worldwide government spending on cloud computing continues to grow astronomically. According to the new ‘Red Cloud Rising’ report that was recently released by the U.S.-China Economic and Security Review Commission, the Chinese government is moving forward with its plan to allocate more than $1 billion to further develop their cloud computing capabilities.
While the Chinese government has not laid out an official definition of what cloud computing involves, according to the report, China appears to want to focus on “indigenous innovation” whereas “U.S. policies aim to promote homogeneous global cloud computing standards.”
This move could also carry major implications specifically in regard to U.S. corporations and consumers since data would be stored overseas. The report states, “China’s plans in this area have the potential to materially impact US economic and security interests. The emergence of China-based cloud computing services and solutions may raise significant concerns for US consumers, particularly if their data is being stored or processed using infrastructure located within Mainland China. Chinese progress in cloud computing is also important due to the Chinese military’s demonstrated interest in developing and procuring advanced cloud computing technologies.”
While this could clearly become a major threat to not only U.S. cloud enterprises in terms of potential business but the U.S. government itself in regard to security, the U.S. can still take counter-measures of their own to reduce or even eliminate this potential threat. There are quite a few deficiencies within the current Chinese cloud computing industry such as little-to-no consistency in the data centers or a lack of innovation – one factor they would put most of the emphasis on as mentioned in the report. It is unclear, however, what the competitive landscape will look like for U.S. cloud companies as the Chinese government tends to promote domestically as long as the domestic companies can meet the ever growing demands of the cloud industry.
The domestic (Chinese) cloud market share is huge as it is expected to reach anywhere between $122-163 billion by 2015.