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Chinese data centre market changes

Anuradha Shukla | Feb. 10, 2015
Local Chinese vendors get more competitive, says Gartner

Local data centre infrastructure vendors in China are getting more competitive, according to a new report by Gartner.

The research firm predicts two-thirds of data centre IT infrastructure spending in China will be obtained by these vendors by 2019.

Previously this market was ruled by global data centre infrastructure vendors but local vendors have stepped up their product service quality, cost control and flexibility in customization.

Improvements in other areas such as research and development (R&D), marketing, service and support is also made by these local vendors who provide their products to consumers at a good price.

"Over the last two decades, global data centre infrastructure vendors have enjoyed high growth rates in China. However, the situation is changing," said Jimmie Chang, principal research analyst at Gartner. "Especially after the Prism affair, the Chinese government has been encouraging government institutions and state-owned enterprises to purchase from local vendors."

Localization and customization

Chinese enterprises want a lot of localization and customization, which global vendors are not able to offer.  

These companies find that global vendors are asking very high prices for professional services, maintenance renewal and spare components.

Regional leaders at global vendor companies can give a tough competition to local vendors by developing a full set of local strategies in China.

Gartner has also predicted that production of wearable devices by Chinese vendors will be more than 100 million units by 2016.

Half of 4G smartphones sold in China will be less than $100 by 2015 due to increase in number of turnkey chipset solution providers.

"Global manufacturers, especially those that are not able to maintain their products in the premium segment of the market, will find it increasingly challenging to compete in the low-cost segment and will cede their dominance in the massmarket sector to Chinese manufacturers," added CK Lu, principal research analyst at Gartner.



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