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Cloud Landing in China

Cloud computing was a key component in the Chinese government's plan, and the country has more than 40 public cloud projects that are currently underway. According to the China Software Industry Association, the Chinese cloud service market was projected to be valued at US$122 billion in 2015.

"Cloud services will remain the essential foundation of the IT industry's third platform of innovation and growth," said IDC's Asia-Pacific research manager for customer insights and analysis, Rubal Sabharwal. "As the cloud market enters an 'innovation stage', there will be an explosion of new solutions and value creation on top of the cloud." And “With the huge increase in the number and diversity of services available in the market, organizations across the industries will shift steadily towards cloud-first strategies to enable digital transformation," added Sabharwal.

Asia-Pacific is expected to spend US$689 billion on tech goods and services in 2016, led by China which has surpassed Japan to become the region's biggest tech spender. This would climb to US$723 billion in 2017, according to projections from Forrester. Enticed by the market potential, more international cloud service providers would like to make available some of its services within China. Such services will be based on computing and network infrastructure provided by Chinese data center operators and ISPs.

International cloud service providers should use the 4 guidelines below as a reference before they start their cloud services in China (for more information about these guidelines, please contact us):


  • -All security devices include firewall IPS and IDS should be produced by local company.
  • -Regulatory compliance: China VAT business licenses (nationwide IDC, ISP, ICP license) are basic requirements.
  • -China's regulations mandate foreign cloud service providers to partner with local infrastructure companies in order to do businesses in the country. Foreign cloud service providers will be permitted to participate in the assessment process but might be required to provide key operating data and source codes for security reasons.
  • -Operation compliance: Cloud services shall be offered only by licensed operators including Tier-1 and Tier-2 support etc.
  • -Data security: All user data is required to be stored and all facilities to be installed within the territory of PRC without direct network connection back to the home country or outside of PRC. Therefore, foreign-managed center is not applicable to China.
  • -Staff from foreign company cannot touch customer data, in particular, PII (Personally Identifiable Information).
  • -MLPS/TC260 Certificates for a qualified cloud service provider is needed by the Public Security Bureau and National Standard Committee. More regulations and new policies are under development.
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Local portal

  • -Local portals and financial systems such as invoice system, tax collection and administration system have to be re-designed and re-developed as tax management and inspection differ from those outside of China.
  • -The design of BSS/OSS system can follow the foreign version but should be connected to the financial systems of the local operators because all contracts have to be signed by local operators.


  • -Purchase order alone is not enough to be used as the evidence of purchase. Organizations and individuals that apply to taxations authorities for making out invoices shall all provide written proofs for purchase and sales activities as well as providing/accepting services or other business activities.
  • -Besides signature, company official seal is more necessary to take the contract effective.
  • -Contracting process is more complicated with both online system and offline approval.


  • -No company credit cards exist in China. Bank transfer is a common practice for companies.
  • -Personal credit card preauthorization is not well-received.


As of now, China has 19 tax categories. Chinese companies have different requirements for local invoices of different tax rates.

Language and culture

  • -All user interface of portal, website and supporting documents should be translated into simplified Chinese.
  • -All customer support staff should be able to communicate in both languages - speak Chinese to the local customers and offer English support to headquarter.
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Data Center

Data centers are complex and expensive facilities, and running them efficiently requires multiple skills in the areas of IT infrastructure management, energy management and building management. Data centers are classified on a four-tier system based on work by the Uptime Institute, a data center industry consortium, and ratified by the Telecommunications Industry Association as the TIA-942 standard. For each tier the standard specifies the architectural, security, mechanical and telecoms requirements needed to achieve a given level of availability: 99.671% (28.8 hours downtime/year) for tier 1; 99.741% (22 hours downtime/year) for tier 2; 99.982% (1.6 hours downtime/year) for tier 3; and 99.995% (0.4 hour downtime/year) for tier 4. Data centers are being reinvented via server and network virtualization, servers with better performance per watt, and the increasing popularity of cloud computing.

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Network/Web access

The country's inconsistent broadband accessibility also remains a barrier to adoption of public cloud services. In a previous ZDNet report, Chris Morris, IDC's associate vice president for Asia-Pacific services practice, said broadband connectivity in China was not consistent and continuous. The average Internet connection speed in the mainland is lower than South Korea and Hong Kong. Internet connection in China is expected to improve as local telco carriers continue to upgrade their broadband infrastructures.

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