Viewpoint

1. At present, there are about 80 firms that have IDC: 40 in Beijing, 20 in Shanghai and 10 in Guangzhou. The tendency of swift growth is developing continuously.

2. The enterprises’ demand emerged in the process of renewal of “standardization” and “e-commerce” of traditional commerce will become the motive power to IDC development.

3. The value-added service of IDC market will change essentially in 2001.

4. The role played by IDC in the overall internet supply chain will change. It will change into central position from secondary position of providing high-speed access and server trusteeship services to enterprises.

5. As a whole, the supply exceeds demand of China IDC market. There will be a large number of new firms to enter into IDC market.

I. An Overview of Market Environment in 2000

 1. Overall Environment of Network Development

a.   Situation of Network Bandwidth

b.   Speedy Development of IDC Companies

c.   Emerging of 3G ISP Company

d.   Trended Integration of Information service Providers (ICP)

e.   National Active Promotion to development of Internet

 2. Technical Situation

 3. Policy Environment

 

II. Total Volume and Structure of IDC Market in 2000

 1. Total Volume and Growth

a.    Total Sales Volume of IDC Market

b.   Total Area of IDC Rooms of the Whole Nation

c.    Total Supply Level of IDC Market

d.   Composition of Value of Sales

 2. Market Structure

a.   Carriers

b.   Internet Service Providers

c.   Other type

Chapter Highlights

With survey on China IDC market, we have conducted comprehensive and in-depth statistics, analysis and study in relation to annual total value of sales, total market supply level, composition of value of sales and structure of service providers from 2000 to 2001. The customer arrangement is on the change, i.e. the service receiver is turn from network companies to traditional enterprises.

III. Analysis on Supply and Demand of IDC Market in 2000

1. Analysis on Demand

2. Analysis on Supply

Chapter Highlights

According to analysis on supply and demand of IDC market in 2000, it is recognized that the demand is transit from traditional server trusteeship service to comprehensive service provided by IDC and the structure of enterprise demand and market supply has been changed essentially. Enterprise demand is developing from simple trusteeship service to comprehensive need while the supply is developing to provide value-added service with greater additional value.

IV. Competitive Situation of IDC Market in 2000

1. Production Competition

2. Brand Competition

3. Price Competition

4. Service Competition

5. Technique Competition

Chapter Highlights

From research, we have discovered that the IDC market is transiting from competition on single product to competition on comprehensive strength in relation to price, service, technique etc. Influences from bandwidth and price are lowered. Technical strength and service ability have been raised to a new level. With market development, some companies with fairly high “market notability” emerged.

V. Main Features of IDC Market in 2000

1. Diversification of Service Providers

2. Customer demand is changing from trusteeship service to lease service.

3. Supply exceeds demand for the overall market.

4. Enterprise demand promotes the development of IDC market.

5. Development trend of industrialization of IDC.

Chapter Highlights

With analysis on main features of China IDC market in 2000, we believe the main trend is that demand from firms and enterprises managing IDC services is on the development of diversification, the role of traditional enterprises in IDC market is more important and IDC market is on the development of industrialization that it will play an more important role in the development of internet.

VI. Analysis on Main Factors Influencing Development of 2001-2003 IDC Market

1. Influence on Market Development of Customer Demand Structure

a.    It is changed from construction of websites for image propagation to development of e-commerce.

b.   It is developing from expensive trusteeship service to cheap IDC service.

c.    Service quality is more important than price.

d.   All-round and systematic professional services should be provided.

2. Influence on market development of technical development trend.

3. Influence on market development of macro economy trend.

Chapter Highlights

The combination of enterprise demand and services offered by IDC service providers has become an important factor influencing market development. The development condition of IDC value-added service plays an important role in enterprises’ acceptance of IDC service.

VII. Main Development Trend of 2001-3003 IDC Market

1. Bandwidth will no longer be bottleneck and network resource will develop forward commercialization and marketing.

2. “Service quality” will become core of competition.

3. Brand benefit will be formed in the field of IDC.

4. New price mode will emerge.

5. IDC will develop to in-depth direction of lease and application.

6. Construction of IDC will develop forward local market.

7. Bandwidth services will greatly promote the development of IDC.

Chapter Highlights

IDC will play a role of “integrated Internet service resource” in future. The development trend of IDC market is to provide more “personal” and “practical” services. Bandwidth will no longer be bottleneck to development. The price will become more reasonable. IDC services will develop toward to local market.

VIII. Quantitative Forecast on 2001-2003 IDC Market Development

1. Forecast on total supply level of China IDC market

2. Forecast on 2001-2003 China IDC market scale

3. Forecast on price tendency

IX. Conclusion and Suggestions

1. Conclusion

a.   China IDC market developed swiftly in 2000.

b.   Enterprise demand gives impetus to IDC market development.

c.   Competition on human resource has intensified.

d.   Innovation of service projects is getting more difficult.

e.   Risk from market expand is uncertain.

f.     Tremendous capital investment and operating cost.

2. Suggestions

a.    To actively popularize conception of IDC service.

b.   Input more energy to develop local market.

c.    To find out what the enterprises need and provide more satisfactory services to them.

d.   To adopt professional service mode.

e.    To change the role of IDC in overall supply chain.

Chapter Highlights

In 2000, China IDC market developed quickly with broad prospect. Enterprises will become main customer base for IDC firms. Service providers are on the development of specialization and have paid more attention to orientation and development strategies. It plays an important role in IDC development to study the change of enterprises’ demand.

Data

Figure 1       Proportion of IDC Service Providers

Data Source: CCID

Explanation of Figure 1: Among IDC service providers, carriers cover smallest proportion with greatest advantage. Internet service providers, who are main force of the market, cover most part. Other types of firms are supplementary part of the market mainly to provide services to some customers of specialized market.

Figure 2       Factors to Be Considered for Choice of Service Providers

Data Source: CCID

Explanation of Figure 2: The standard for enterprise to choose service providers has changed by stealth. Before, attention was only paid to bandwidth and price, but now, the comprehensive service ability of IDC is considered.

Figure 3       Tendency of Trusteeship Service Charge

Unit: RMB/Set/Month (share of 2M bandwidth)

Data Source: CCID

Explanation of Figure 3: In order to maintain formal revenue and retrieve costs, IDC firms wouldn’t have lowered their prices too much in 2000 when the market is not mature and under the condition that they are unable to obtain profit due to the number of customers. But in 2001, heated competition on price will rise on IDC market.