Merging cloud, big data and smart cities

China is also fast becoming one of the world's largest spenders on cloud computing facilities, overtaking even the United States and the European Union.

"Unlike other economies, China spends half of its investment on hardware including networks and other infrastructure," Hakanen says, adding that Western counties are spending less on hardware.

"Let's not forget that a well-functioning cloud computing system also requires considerable investment in software," he says.

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Accenture believes that although infrastructure investment will remain robust in China, more money needs to be spent on network building and smart city initiatives.

State-owned enterprises and governments are the most promising customers for the nation's booming cloud industry.

The Big Three telecommunication carriers, China Mobile Ltd, China Telecom Corp Ltd and China United Network Communications Group Co Ltd, are building their own data centers in inland areas such as Inner Mongolia autonomous region and Guizhou province.

In February, officials from Guiyang, capital city of Guizhou, indicated that they plan to make cloud computing a new "pillar industry". The southwestern city was known for its Soviet-era military industries such as fighter plane manufacturing.

But the mountainous province has also been a long-time research and design base for the People's Liberation Army. The heavy industry has largely depended on military-related factories since the 1960s.

"The cloud computing infrastructure coming up in Guiyang will be the backbone of the emerging big data industry," says Mao Youbi, vice-mayor of Guiyang.

The city also hopes to lure more big data companies with its better natural environment and lower living costs than in Beijing, Shanghai and Shenzhen.

"Although economically developed cities such as Beijing and Shanghai still hold some technology advantages, Guiyang could become a major regional hub in big data because it is the only province that has a clear development blueprint for the sector," says Zhao Guodong, secretary of Zhongguancun Cloud Computing Industry Alliance, a Beijing-based industry association.

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