The industry still face a lot of challenges

It is in this contextthat China's next generation data center market has entered a fast-growthstage.Characteristics of Next Generation Data Center Building and ItsOperational Status in ChinaHardware accounts for a rather high percentage of investment. Investmentin next generation data center products mainly includes three parts: ITinvestment, machine room equipment and consulting services. CCID Consulting'sdata show that in 2008, IT accounted for the biggest part of investment amongthe three parts, reaching 70, while server procurement accounted for 50 ofthe IT investment. This shows that next generation data center building inChina is still in its initial stage, with hardware accounting for a ratherhigh percentage of investment.

Professional consulting services accounted forless than 4 of the IT investment, which shows that users lack overall earlyplanning for their data center building and have yet to improve theirunderstanding of consulting services.The telecom and financial service industries make up over half of themarket. In terms of industry structure, next generation data center buildingin the telecom and financial service industries started rather early withlarge investment, and applications are relatively mature. Currently, theinvestment in these two industries accounts for over 50 of the total.The industry still face a lot of challenges. As thedemand for centralized data management in various industries rises andbusiness models continue to reform, there will be an urgent need forenterprises to integrate their businesses through technological innovationsand to build next generation data centers.Development Trend of Next Generation Data Centers in ChinaDespite the many challenges, CCID Consulting believes that the nextgeneration data center market will continue to maintain a fairly fast growthmomentum in the future. Firstly, despite a slowdown in China's macro economy,the overall economic situation is nevertheless in good shape.

As thegovernment's successive introduction of related measures to cope with thefinancial crisis and the implementation of the four-trillion-yuan economicstimulus package, the investment of over 10 trillion Yuan will be driven up inlocalities Such large-scale investment is bound to push up IT inputs. Thiswill undoubtedly play a tremendous role in promoting the development ofChina's next generation data center market. Secondly, enterprises now face aseries of problems that traditional data centers fail to resolve, and areeager to switch to new data centers. There will be various increases in new,expanded and reconstruction projects, and future investment will remain high.Thirdly, next generation data centers in China are in a period of fast growth.Projects construction also requires a certain cycle, and thus has a strongability to withstand market fluctuations and risks. The gradual deepeningof the concepts of energy-saving, secure and intelligent management and thecloser cooperation between vendors and between vendors and users also lay afoundation for the healthy development of the data center industry in thefuture.Fig. 2: Forecast for Size and Growth of China's Next Generation DataCenter Market, 2009-2011 http:// CCID Consulting, December 2008Looking into the future of China's next generation data center market,CCID Consulting believes that driven by the large-scale infrastructureinvestment, and under preparation of major world events such as Shanghai WorldExpo and the Guangzhou Asian Games, demands for IT applications in such keysectors, including government, telecom, financial services and energy willcontinue to be strong in the next few years.

Next generation data centers thatare low in maintenance costs and induce quick returns are bound to become amajor highlight in the IT market.About CCID ConsultingCCID Consulting Co., Ltd. Headquartered in Beijing, CCID Consulting has so far setup branch offices in Shanghai, Guangzhou, Shenzhen, Wuhan and Chengdu, withover 300 professional consultants after many years of development. Thecompany's business scope has covered over 200 large and medium-sized cities inChina.Based on major areas of competitiveness: industrial resources, informationtechnology and data channels, CCID Consulting provides customers with publicpolicy establishment, industry competitiveness upgrading, development strategyand planning, marketing strategy and research, HR management, IT programmingand management. CCID Consulting's customers range from industrial users inelectronics, telecommunications, energy, finance, automobile, to governmentdepartments at all levels and diversified industrial parks CCID Consultingcommits itself to becoming the No.