Tech

Server, storage, and security tech boom in China

Chines buyers are spending up big on storage, servers, and security, according to reports by International Data Corporation (IDC) released this week.

The Middle Kingdom is the world’s fastest-growing storage market, IDC said, finding that for Q2 2021 China’s market grew 33.5 per cent year on year, against global growth of 9.7 points year-on-year. China’s external storage market is now US$6.9 billion a year.

The nation’s security market also surged. In 2019 China’s network security services market was already on the rise thanks to surging demand and the nation’s 2017 Cybersecurity Law that required network operators store select data within China. That law, alongside others that bolstered tech made in China, saw many new security services sprout.

Overall revenue from China’s IT security service market vendors subsequently increased 110 per cent in the first half of 2021, year-on-year, totalling around US$1.1 billion and bringing China’s IT security service market into what IDC refers to as “a period of full-scale demand”.

The security consulting service markets in particular saw a whopping 172 per cent year-on-year increase, attributable to pre-pandemic policy changes requiring compliance, testing and emergency services that were backlogged until the COVID situation became more stable in 2021 and services could be provided.

Other factors contributing to the boost in China’s network security services were smart city and other infrastructure-related projects increasing and training people to use the new enterprise-level network systems.

Meanwhile, China’s server market achieved an increase of 85.1 per cent year-on-year, reaching US$2.19 billion, with GPU-equipped servers occupying 91.9 per cent of the market. Non-GPU accelerated servers grew too, by 127.1 percent year-on-year reaching US$190 million, but accounted for just 8.1 per cent of market share.

Inspur, Ningchang and Huawei were the top three vendors, collectively accounting for 70 per cent of the market.

IDC chalked this growth up to AI infiltrating every aspect of life, increasing application scenarios. The firm expects the type of AI chips in demand to narrow and become more pronounced and less broad as industries and applications mature.

As for the future, IDC predicts that China’s accelerated server market will reach 10.86 billion US dollars by 2025. When it comes to network services, end users are trending away from stacking security products and towards the use of services offering existing and complementary product functions.

At least one of the growth trends IDC identified may not continue. The analyst firm says some storage sales were spurred by cryptocurrency-related activity, which has since been banned. The firm also suggested that mechanical hard disks sales will slow because solid state disks use less energy and will therefore be preferred in pursuit of carbon dioxide emission reductions. The firm also found that rising adoption of storage-intensive apps – like the picture archiving and communication systems that are a mainstay of medical IT – will keep demand strong. ®


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