Ready, player anyone? China's gaming ban left cloud providers looking for someone to play with

Canalys CEO reckons up to 30 per cent of big Chinese clouds' infrastructure is under-used, new datacentre builds deferred


China's decision to limit minors to three hours of gaming each week has proven problematic for the nation's clouds, which find themselves with unused capacity.

So said Steve Brazier, CEO of channel-centric analyst firm Canalys, at the company's Asia-Pacific Forum

"25 to 30 per cent of Chinese cloud capacity was for gaming," Brazier said. Chinese clouds like Alibaba are now trying to figure out what to do with that capacity. Some have even deferred datacentre builds as a result, Brazier said.

The CEO rated China's increasingly strong data privacy regulations, and actions to limit the market power of local tech giants, as "bold" and suggested the global tech industry should brace for more regulations in more nations.

Brazier also added a little to his remarks at the EMEA version of the Forum in October 2021, suggesting that as the pandemic wanes and businesses resume attendance in their offices, spending on Wi-Fi and collaboration kit will soar. Supply chain challenges, however, will mean that vendors pick and choose whose orders they fulfil.

Enterprises, Brazier said, are generally higher up the pecking order as vendors sell direct when they can – a trend illustrated by smartphone vendors choosing to deal with their giant carrier customers before they send product to distributors that serve smaller resellers.

Small to medium businesses must make do with whatever kit their preferred resellers can secure – if those resellers can develop the procurement skills needed to get kit through the door at all.

If resellers can't get the product end users want, Brazier said, they'll offer customers equivalents – and charge like wounded bulls.

"We have taken price out the equation for the first time in years," he told resellers.

The ability to charge more means the IT services industry has decoupled its growth from trends in gross domestic product. Despite inflation, stock market uncertainty, and the lingering effects of the pandemic, Brazier predicted IT services businesses will thrive in coming years. And end users will pay for it to happen – although perhaps not China's cloud providers. ®

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