Certainly, both Russia and China are emerging as important players in the global data center market, with massive investments being made in building state-of-the-art data centers. China in particular is ramping up its efforts, with plans to triple the size of its data center industry by 2023, and invest more than $100 billion in the sector over the next few years. Similarly, Russia has set its sights on becoming a leading data center hub, with companies such as Yandex and Rostelecom investing heavily in the sector.
The data center market in China has been rapidly growing, and it is now the world’s largest data center market in terms of size, with an estimated market size of $20.1 billion in 2019. It is projected to reach $37.4 billion by 2025, with a CAGR of 10.2% during the forecast period (2020-2025). The Chinese government has been investing heavily in the development of this sector, including the construction of large-scale data centers.
Similarly, Russia has seen a marked increase in its data center industry, with a market size of $1.8 billion in 2019, projected to reach $2.7 billion by 2024. The government has made significant investments in this sector, with the Digital Economy program allocating $2.2 billion towards developing the country’s digital infrastructure by 2024.
China and Russia also have various government initiatives that promote the growth of their data center markets. In China, the government has introduced several policies such as “Made in China 2025” and “Belt and Road Initiative,” which aim to support the development of high-tech industries, including data centers. In Russia, the government’s “Digital Economy” program seeks to modernize the country’s digital infrastructure, and the “National Data Management” program aims to create a unified national data platform.
One of the strengths of the Russian data center industry is its advanced security measures, ensuring that sensitive data is protected and inaccessible to unauthorized entities. China’s advantage lies in its large pool of talent, low-cost labor, and strong manufacturing capabilities. Leading Russian producers and distributors of equipment for data centers include TTK, RASCOM, and DataPro. On the other hand, Chinese companies such as Huawei, Lenovo, and Inspur are some of the industry leaders in China.
However, many data centers in China and Russia continue to rely on older, less efficient technologies, and there are concerns around the ability of the regulatory environment to keep pace with the fast-changing data center market.
Moreover, there are geopolitical concerns that could influence the development of the data center industry in these countries. For example, sanctions and other restrictions imposed by Western countries could limit the ability of Russian and Chinese companies to participate fully in the global data center ecosystem. Similarly, concerns around cyber security and data protection laws could make it difficult for these countries to build trust with potential international partners. This scenario limits the availability of advanced technology equipment which affects the competitiveness of their data center industries. More so, the regulatory environment in both countries can be ambiguous and inconsistent affecting investor sentiments.
In conclusion, Russia and China have embarked on a journey to develop their data center industries as a requisite to equip their digital markets with the right infrastructure. Though the sanctions have been a significant challenge, both countries are exploring ways to overcome these challenges. To foster excellence in their data center industries, both countries are developing relationships with the West’s leading technology providers, resulting in technology transfer collaborations.