China is a lucrative and not so easy destination to start with Cloud Computing business. There are 5 key challenges listed over here that makes China difficult for foreign players to establish their Cloud Computing business. Initial stage hiccups might be there,but, China will come out loud.

1. 5 Key Challenges To Cloud
Computing
In China

8. 1. Data centers results in huge power consumption upto the limit
of around 5% of the total consumption in China. To set up data
centers for Cloud Computing, power generation and distribution
has to be very essential across the provinces. China is still a
laggard in this area

9. 2. “Cloud Computing” use is not classified as on till date in China.
This is still considered as a VATS (Value Added Telecommunication
Service ). Chinese Government is still not clear about licensing
process for using Cloud Computing. The Cloud Computing
Provider have to secure a license, if falls under the provision of
Internet Data Center (IDC) services. If the cloud services do not fall
under 2003 Classification Catalogue , then just have to file and
record the case with the provincial counterparts of the Ministry of
Industrial and Information Technology ( MIIT). There is no defined
and specific procedure to file and record. In gist. Licensing and
government permit delays for Cloud Computing Service Providers

10. 3. Government restrictions on foreign investment in Cloud
Computing services. Under 2003 Classification Catalogue, Cloud
Computing was considered as an allied service to telecom industry
and ,so, provisioned under IDC licenses. Foreign Cloud Service
providers have to establish a FTE (Foreign Investment Telecom
Enterprise ) in China and foreign investment should not exceed 50%
and the registered capital should be more than 10 million RMB or
1.6 million USD. The entity should be a joint venture between a
Chinese and the foreign firm. Besides, that there are dozen of
approvals, licenses and verification processes for the foreign
investor o set up a joint venture with a local company. Practically,
the establishment of FITE is restricted in China. A major challenge
to the growth and survival of Cloud Computing in China

11. 4. Very high Capex requirement for Cloud Service Providers for
setting up data centers in China. Setting up data centers attracts
higher customized solution for power consumption and
distribution. Making bandwidth available across provinces also
need high Capex in laying fibre cables.

12. 5. Data security in Cloud is more vulnerable than the data in on
premise IT environment. Cloud Computing architecture supports
computing concepts and technologies like Service Oriented
Architecture (SOA), Web 2.0, Virtualization and other technologies
which are dependant on internet. These concepts and technologies
have their own security issues which are been inherited by Cloud.
After, the Edward Snowden allegation on US Government for
snooping on Chinese information, the Chinese Government has
become more stringent on exposing its information and data centers
to Cloud environment.

13. Exelanz, LLC
Marketing@exelanz.com
Phone: (860) 677-8883
Exelanz, LLC, an IT managed services company based in NY,
USA. Besides, Exelanz is a key Cloud Infrastructure
Management company having noteworthy experiences in serving
Chinese Clients. Exelanz, has partnered with a local Chinese
company to comply with Chinese IT vendor regulations