I've had plenty of discussions on the subject of data center businesses going into China. Scott Noteboom is the latest to make the announcement he'll go into emerging markets including China. DCK covers the latest and Scott's statement he has the secret sauce to do business in China.
Noteboom believes he’s put together the connections and resources to make China more accessible. ”We believe that we will be the first provider to enable non-Chinese companies to smoothly deploy in China,” said Noteboom, who said he hopes to bring new data center technologies into China to realize exceptional efficiency and economics.
Noteboom isn;t supplying many details just yet. A key aspect of the plan will be site selection. Noteboom says LitBit hopes to identify the Asian equivalents of Quincy, Washington – previously unknown sites that provide exceptional economics and efficiency for data center operators.
My perspective on China is based on when I worked for Apple and Microsoft and would acquire power supplies and Simplified Chinese fonts. There are many meetings, negotiations and ongoing contract maintenance. I've also known many people who have worked in China localizing Microsoft software or developing software in China.
Whenever someone in the data center industry says join me in working in China I say no thank you.
Here is a post that does a good job of explaining the challenges of doing business in China. Five points are made. #3 is the one that most don't know how to address.
Number three is kind of similar to number two. In China, there is always a story behind the story. There’s a person behind the person. It’s never what you see on the front end. It is partially related to cultural issues. For 5,000 years there has been this inside outside orientation to much of Chinese culture and as an outsider you are shown a certain view and as an insider you are shown a certain view. And there are various levels of being an insider or outsider. Again when you are trying to do business with a company or a person, you should find out where this person is from, where this company is from. What is their history? How did they become who they are today? How did they get their money? Who is behind them? There is always someone sitting behind them, and not in a nefarious way. You are not talking to some puppet or shadow. There is just a level of complexity to Chinese business and to Chinese society that is important to take into account. We advise companies to never stop asking questions.
It will be interesting how LitBit does in China. I helped out one friend who needed a resource that can address the above issue. There aren't many. You need a strategy and full time commitment to win in China, and even then you may lose.
Many people think China is new, but it is a country where Power and Money is in its DNA which by the way is not that much different than other countries. It is just China has been at it for 5,000 years and it can be different than a Western approach.