(JW Insights) Aug 16 -- China's data center services market grew by 12.7% in 2022, reaching a market size of RMB129.35 billion ($17.8 billion), according to IDC's latest report.

IDC predicted that China's data center services market will continue to grow at a compound annual growth rate of 18.9% over the next five years, with an estimated market size of RMB307.5 billion in 2027.

The overall supply scale of server racks is still growing rapidly. A considerate number of racks were put into production last year, this can be attributed to the policy on strengthening the construction of new infrastructure such as the Internet of things, according to a China Daily report.

Data center service providers have accelerated their layout to the surrounding areas of first-tier cities, influenced by the country's strategy to channel more computing resources from the country's eastern regions to its less-developed yet resource-rich western regions.

Beijing saw a relatively strong demand for data center services, due to a considerable number of internet enterprises and central state-owned enterprises headquarters.

From the prospect of the overall market, three major telecom operators - China Mobile, China Telecom and China Unicom - still dominate, accounting for 60.2% of market share, but the share of third-party service providers continues to increase, from 39.3% in 2021 to 39.8% in 2022, said the report.

The third-party providers held increasing advantages, such as the location advantage of scarce resources in first-tier cities; the high-quality rack resources are more in line with customers' needs, and a faster and flexible response to customer needs.

The market concentration of third-party data center services is increasing rapidly, with the market share of the top 5 service providers increasing from 45% in 2021 to 48.8% in 2022, said the China Daily report.

(Yuan XY/Gao J)