CenturyLink Launches Shanghai Data Center, its First in Mainland China

CenturyLink Technology Solutions has established a data center in Shanghai, its first location in mainland China. The company has two in Hong Kong, two in Singapore and one in Tokyo.

The facility is operated by GDS, a major Chinese data center provider. CenturyLink also partnered with local IT services provider Neusoft which buys the hardware and leases the data center space on its behalf.

The world’s second-largest economy is also one of its fastest-growing IT markets. A recent Gartner estimate is that IT spending in China will reach $375 billion in 2015.

Staying within the Great Firewall of China

CenturyLink went through the trouble of setting up a data center in mainland China even though it already has an extensive footprint elsewhere in Asia Pacific primarily to address customers’ concerns with data sovereignty and performance. There is always some difference in latency for a service from location to location, but this difference is bigger in China, where all cross-border network traffic goes through what is popularly referred to as the Great Firewall of China.

Officially dubbed the Golden Shield Project, it is essentially an Internet surveillance and censorship system. Not only does it slow down the movement of data to and from mainland China, there is also a lot of potential for errors, since the system can shut off entire blocks of IP addresses which sometimes include addresses it did not mean to shut off, Brian Klingbeil, CenturyLink’s senior vice president of international development, explained.

Therefore, a service that caters to customers within the country’s borders generally performs better if it is hosted within those borders and doesn’t have to pass through the Golden Shield. “Enterprises wanting to compete in China need to host their IT in China,” Klingbeil said.

Partner acting as eyes and hands on the ground

It is difficult for an outside company to set up a business in China. Chinese regulations preclude a company like Monroe, Louisiana-based CenturyLink from owning or physically operating IT equipment in the country, for example, hence the partnership with Neusoft.

CenturyLink designed the environment within the GDS data center and manages it remotely, but its eyes and hands in the facility are Neusoft. The partnership also gives CenturyLink access to a local firm that can help its non-Chinese customers establish operations in the country.

CenturyLink’s pod in the GDS facility is the same as its pods elsewhere around the world, Klingbeil assured. It is a multi-tenant managed hosting environment, but the company can also provide some colocation space in the facility for customers who need a hybrid setup.

Customers using the Shanghai location get the same portal, the same management team and the same support desk as they get in other CenturyLink locations around the world, of which there are close to 60.

Growing Chinese data center provider

GDS has 17 data centers in mainland China and Hong Kong. In July, an investment company called Singapore Technologies Telemedia bought a 40-percent stake in the data center provider with the plan to grow its footprint further.

In the past, ST Telemedia has also invested into Savvis, which CenturyLink bought in 2011 and used as the foundation of its data center services business. Clingbeil used to be chief operating officer at Savvis.

Another past recipient of ST Telemedia investment is Equinix, the U.S. based colocation giant.

The other GDS owners are SB China Venture Capital, International Finance Corporation and China Everbright.