It’s not particularly surprising that China is well on the way to becoming a superpower in the world economy. However, with the new tariffs raising concerns for global economic growth, the trade negotiations between China and the US seem to be stalling. Despite the slowly escalating trade conflict, there are plenty of opportunities for investors in various sectors to benefit from the current market conditions.
It’s stating the obvious that the Chinese market is dominated by e-commerce giants, Internet providers, and cloud services. What many people are not aware of is the huge total market share that China occupies in the Asia-Pacific (APAC) region, and the impact this has on the rest of the world.
Trends in the Data Center Sector
Recent research conducted by Synergy Research Group dedicated to the cloud market in the APAC region uncovered some interesting results; Chinese and Japanese, as well as American service providers, lead (and dominate) the cloud computing industry. While Amazon ranks at the top, it is closely followed by Alibaba, the e-commerce platform of Alibaba Group Holding Limited, a Chinese multinational conglomerate company. Microsoft ranks third, followed by Tencent, Google and Sinnet.
Due to language and cultural barriers, it is unlikely that China can be a leading market for the world’s largest cloud providers because more companies are headquartered in the US. However, China’s cloud boom has already had an impact on data center facilities around the world.
The tremendous increase in the size of China’s digital economy is motivating more investors to take advantage of this trend. This explains the significant investment in GDS Holdings, a Chinese data center provider that trades on NASDAQ. With the recent downturn of events, many investors are being more cautious with their investments.
Is it Wise to Invest in Data Centers in the US?
The economic forecast may look bleak between the US and China, but there’s no denying that the data center sector is still a promising field for investors.
Keeping in view the exponential shift towards global digitalization, companies are looking for tech-savvy ways of doing business. Whether people are buying groceries or much more valuable assets, most trades and purchases are happening online, forcing organizations to improve their IT infrastructure as well as invest in data storage or similar services.
While this trend means a higher demand for collocation providers and cloud companies, they are not the only beneficiaries of changing trends in the data center sector. The current situation offers ideal conditions to invest in US data centers because the cost of cloud computing is expected to rise.
Meeting the increased demand for cloud computing services and data centers means that collocation providers need to expand and upgrade their facilities. In addition to enhancing the physical infrastructure to accommodate more hardware required for this purpose, facilities are also trying to offer extra services, such as managing security, in addition to providing core services like space and storage.
If you are looking for ways to diversify your investment portfolio, then investing in data centers in the US is a profitable option definitely worthy of consideration.
