The Opportunity in China: An evolving market within an evolving country
This past month I traveled to Beijing, China, for the third time this year. On this trip, I had the opportunity to meet with many key technology companies there and to keynote several events, including LinuxCon ContainerCon and OpenInfra Days. My focus in each case was to discuss and advocate for digitization, open source software, the growing cloud-native market, and of course, Cloud Foundry. With each trip to China, I gain a little more insight into how — and how quickly — the technology landscape is evolving there.
While news of tariffs and a looming trade war hovered around the edges of my conversations, what struck me most was the sense of enthusiasm and excitement about the growing technology market, and the move many companies are making towards a digital future.
As the Made in China 2025 initiative suggests, China is making big moves and big bets on cloud, AI, robotics, and on and on. This is a space (if not the space) to watch — and it’s not going to take until 2025 to see the impact China will have on the technology industry globally. In fact, I estimate we will start to see China’s technology companies competing in the global market in a big way in the next twelve to eighteen months.
Names everyone will know, just like FANG — Facebook, Amazon, Netflix and Google.
If these visits to China have taught me anything, it’s 1) that Beijing in July could use a stronger appetite for air-conditioning and 2) at any temperature, there is an enormous focus on Baidu, Alibaba, Tencent, and Huawei. These mega-tech companies each have massive portfolios that range from e-commerce and financial services to social media and, of keen focus to me, public and private cloud offerings.
The drive for companies, across every industry, to become software companies really started in earnest in the U.S. in 2014, in Europe in 2016, and is now taking hold in China. The drive for businesses to deliver new value via software is spurring a move to more agile practices, creativity and ultimately, a new connection to customers.
It might be tempting to say that China is a step behind, but from my conversations on the ground, I’m convinced that the existing, and rising, technology companies in China, will move faster with digital transformation than Europe or even the U.S. has to date. China simply moves faster, period. The unspoken mindset seems to be: get as many people working on a solution as possible, and go as fast as you can.
What adds tremendous backing power to this collective grit are the broad initiatives set into play by the government. The burgeoning technology industry is in large part fueled by the prioritization and subsidies tied to hiring and training of a new workforce, with the intent to uplevel people with modern cloud-native skills as quickly as possible.
An emerging market within an emerging market within an emerging country
What makes China so fascinating to watch is the dynamic interplay — the companies are evolving, the tech is evolving, the market is evolving, and the country is evolving and opening in new ways, and it’s all happening at a really rapid rate.
Just as 2025 is a goal post initiative to digitize across industries, so is the desire I heard repeatedly to move in the direction of innovation and thought leadership.
It will be fascinating to watch how these simultaneous evolutions, along with the entrepreneurial desires inherent to the human spirit, unfold over the next few years. To me the question isn’t so much if Chinese companies will successfully compete on a global scale, but how they will ultimately choose to go about engaging on the world stage.
Open source as global collaboration
Open source, especially for China, offers a good faith pathway to global participation. And I’m not just saying this as a representative of Cloud Foundry, but as someone who has spent her entire career in technology. Open source continually pushes me to think about how to be empathetic, and how to collaborate with very different people from across many different cities and regions and countries. With so much turmoil in our world, it’s easy to see how global engagement could shrink under the stress. But we have to continue to keep lines of communication and collaboration fluid. While open source is not the only answer, I believe it is an essential part of a healthy technology strategy.
I’ll be back to China for a few more visits this year, and when I do, I’ll be very interested to see what else has appeared on the horizon.