GDS Holdings, the major Chinese data center provider that recently entered a partnership with CyrusOne – including a $100 million investment by the US-based colocation heavyweight – announced it will build a 54,000-square foot data center for Alibaba, China’s largest e-commerce and cloud services company.
Providing data center services for Chinese hyper-scale platforms is central to GDS’s business. Customers like Alibaba, Baidu, and Tencent are responsible for 75 percent of its revenue, according to the company, which is the reason CyrusOne chose it as its partner: to help it land more deals with Chinese tech giants as they expand footprint in the US.
The 54,000-square foot facility GDS is going to build for Alibaba in Hebei Province will be the first of several construction phases at the site, which is expected to eventually become an Alibaba data center campus.
Analysts expect Chinese enterprises, who currently spend relatively little on cloud services, to quickly ramp up the rate of outsourcing to cloud providers in the coming years. That, combined with regulatory and cultural difficulties foreign companies face in China, positions domestic companies like Alibaba for growth.
And, much like its new partner and investor CyrusOne has benefitted from American cloud giants’ skyrocketing growth, GDS is set to benefit from growth in the Chinese cloud market. Unlike CyrusOne, which is up against a handful of formidable competitors in the US market, GDS dominates China’s carrier-neutral data center market, where there aren’t many comparable players.
“There are very few viable carrier-neutral data center providers within China,” Jabez Tan, data center research director at Structure Research, told Data Center Knowledge. “21Vianet is another sizable carrier-neutral colocation provider, though it has been involved in some fraud controversy in the past couple of years that has likely propelled GDS as the front runner in China.”