IoT Cloud Roadmap and Opportunities in China: Part 2 – Challenges

The “IoT Cloud Roadmap and Opportunities in China” panel discussion was held at iCU Hong Kong on June 20, 2017. The entire discussion covered three key areas: Opportunities, Challenges and Partnerships.

Moderator – Wing Dar-Ker: President, 21Vianet Group, Blue Cloud Panelists – David Sung: President of Greater China, NCR. Eliza Kwok: SVP, Avanade Greater China (joint venture of Microsoft and Accenture in China). Jeff Wu: Co-Founder & CEO, High-Cloud & Panta AI

Challenges facing multinational companies in China is a long-lasting theme of discussion and a critical part of the China GTM strategy for any size of companies wanting to bet their fortune on this land of opportunity. Our panelists of enterprise IT veterans who served as leadership members of China GTM strategies of Microsoft, IBM, VMware and Avanade identified 3 key challenges that international cloud service providers want to keep in mind.

1. Acquiring Government Licenses & Permits
Though China has become a WTO member since 2001, the entry barrier is still there if you think it is gone. Specifically, cloud service, especially public cloud, is categorized as telecom value added service in China. Under the rule of WTO, it is actually feasible for local government to regulate this area by requiring companies to have special licenses or permits to provide cloud services in China. IDC (Internet Data Center) license, ISP (Internet Service Provider) license, and ICP (Internet Content Provider) license are just some examples of government issued licenses that enterprises will need to obtain before they can legally provide cloud services. In reality, none of the licenses are easy to get, especially not for foreign companies.

2. Localization
How do we cater the taste and consumer behavior of Chinese end users? Can we leverage the core functions and be assured by the same service level on public cloud services in China as those provided by international clouds? Is it possible to set up our testing cloud environment in China before we move forward? The process of localization itself is a journey of uncertainty.

3. Disadvantage Vs Advantage
The concerns on system security, intellectual property safety, the cost on suppler management, the risk and impacts from government’s change of regulation are all factors to consider when it comes to the measurement on the benefit of entering into the Chinese market. By deploying your cloud strategies in China, a comprehensive measurement on your success should be established to always keep you on track.

With over 20 years of development, the information technology market landscape in China has evolved from initially when multinational companies were in leading position, bringing technology and knowhow into China, to now more sophisticated domestic players and severe competitions emerge. As the challenges are always there, in this new chapter of doing business in China, don’t wait until it is too late to make any strategic planning to beat the challenges ahead. While it seems like an uneasy water to travel through, strategic partnerships with local companies who can help navigate the business have become the most concrete solution for many international companies to overcome those potential challenges.

See also:
IoT Cloud Roadmap and Opportunities in China: Part 1 – Opportunities
IoT Cloud Roadmap and Opportunities in China: Part 3 – Partnerships