China’s cloud computing market is estimated to grow at an annual rate of 50% in the next few years and will reach more than 13.6bn CNY by the end of 2015, according to Zero2IPO Research Center, a Chinese research institution.

Against such a backdrop, Focus caught up with Dr He Baohong, Director of Internet Center from China Academy of Telecommunication Research of the Ministry of Industry and Information Technology (MIIT), to find out more about this promising cloud computing market.

Dr He told FOCUS the major players of China’s cloud computing market are Internet companies such as Alibaba, Baidu, SNDA (China’s major online gaming service provider) and SINA. “The three telecommunication players (China Telecom, China Mobile and China Unicom) dominate the Infrastructure-as-a-Service (IaaS) market, yet they lag behind those internet companies in terms of R&D and innovations,” He said.

“China’s cloud computing market has already passed the nurturing stage and is now developing very rapidly. It is estimated that China’s public cloud will grow at an annual rate that is higher than 70%. The entry of foreign cloud computing players will also facilitate the robust development of China’s cloud computing market.”

China’s cloud computing market, however, is faced with many challenges. “Concerns for data sovereignty and privacy, cloud reliability and after-sales service, bandwidth issue, among others are preventing Chinese users from using cloud services more widely,” He said. “Many companies have accepted the cloud computing concept, yet their investment and usage of cloud service is still limited to some extent.”

To address the data security and privacy issue, MIIT has announced Regulations for Protecting Personal Information of Telecommunication and Internet Users for public deliberation this April. “In addition, MIIT is now engaged with the Project for Enhancing Broadband Speed in China, which involves developing standards and methods for broadband speed testing and doing in-field testing work so as to promote the development of China’s broadband networks,” He said.

He said that cloud computing organizations/alliances have played an important role in promoting the healthy development of China’s cloud computing market. “One of the examples is Cloud Computing Development and Policy Forum, which focus on formulating cloud-related policies and standards for China’s cloud computing market.”

It is a cloud computing forum established in 2011 by China Academy of Telecommunication Research of MIIT, together with major telecommunication players, internet service providers, equipment manufacturers and research institutions in China.

“The forum attaches great importance to the cooperation with international data center and cloud computing organizations. Currently, it has very close exchanges and cooperation with Green Grid. Moreover, it is the organizer for cloud computing exchange activities between the Chinese and the American Government. It is also deeply involved in helping APAC (Asia Pacific) countries to conduct cloud computing exchanges and cooperation at the government level,” He said.

Compared with mature cloud computing markets, such as the US, China’s cloud computing market lags behind by several years. “The cloud services provided by the US market are much richer and diversified, and the price war is much more intense, compared with the Chinese market,” He said. “To catch up with the US, we must work hard on product and service innovations, data security and privacy protection, among others. The key is to encourage more customers to use cloud service. In this aspect, small and medium-size enterprises (SMEs) which are backward in terms of informatization represent a very promising market.”

He was a keynote speaker at the Datacenter Dynamics Converged Chengdu Conference this June. In his keynote speech he addressed a wide variety of issues including the challenges of China’s data center market and relevant standards and regulations promulgated by MIIT together with other government bodies.

DatacenterDynamics Converged takes place today in San Francisco. Key note speakers at today’s event include NTT Innovation Institute CEO Srini Koushik, Microsoft’s David Gauthier. Facebook’s VP of site operations Thomas Furlong and California Air Resource’s Brian Turner. Visit the program guide for San Francisco here.