Internet & E-Commerce

In 1H 2008, China's education sector networking equipment spend reached 1.12 billion Yuan, and by the end of 2008, CCID Consulting projects spending to reach 2.19 billion Yuan. In 2007, education sector networking equipment spend reached 1.98 billion Yuan, up 10.61% over 2006.

In recent years, the Chinese government has announced a number of policies and measures designed to bolster China's educational IT infrastructure, which include those for distance learning, primary schools, secondary education, “school communications” projects, IT standardization, higher education campus networking, IT education, and others.

Despite significant progress in education sector IT adoption and implementation, China's education sector continued in 1H08 to upgrade existing networks and to keep up with technology advances.

• In higher education, campus network build-outs are being completed which would drive less network equipment purchases, but this factor is balanced by the push towards applications, which spurs network upgrades and purchases to keep up.
• China's general adult education segment had a late start on IT and network adoption, so network implementation has been on a small scale. Low-end networking equipment will grow to fill that need.
• Vocational schools have enjoyed increased enrollment. As a result, their existing network infrastructure has been unable to support their growth, and their demand will help drive network equipment growth.

Vendors target products to education sub-sectors.

As demand for education sub-sectors differ, so are vendors' product positioning. For example, leading vendor H3C has launched a series of solutions and promotions targeted specifically towards higher education, general adult education, and vocational schools. Rujie Networks, with its experience in network construction, launched an overall solutions approach focused specifically in higher education.

Wireless LAN (WLAN) is the new and much needed focus for higher education campus networks.

The number of physical LAN access points across China's college campuses is simply not keeping up with burgeoning student enrollment. Increasing physical access points have been difficult due to existing layouts of classrooms, libraries, and other student gathering areas. Many campus buildings have historical value, further limiting options of more cabling and physical access points. WLAN overcomes these physical barriers, and also offers much better costing.

Vendors are competing more on wireless campus network construction and upgrades. H3C was the first vendor to offer its “Adaptive Wireless Campus” solution, which can build upon existing networking infrastructures, and expand them into a seamless indoor/outdoor wireless network with unified management capability. Cisco has also responded similarly, especially with wireless solutions implemented in the dormitories. Rujie Networks offers solutions that increases wireless access points with no needed changes to existing physical network cabling.

The increasing importance of security.

China's education institutions, as they become more sophisticated with their networks and applications, are increasingly contending with viruses in all its various forms and malicious attacks. Institutions are concerned with keeping the integrity of their campus information systems and databases, and realize the importance of security.

Vendors are also recognizing this need. From a network equipment and solutions perspective, only Cisco and H3C in China have strong competitive offerings by virtue of their technological advantages.

In summary, China's education sector is providing new and changing market opportunities for vendors. However, as network adoption has been fast and changing, vendors will need to understand the specific needs of education sub-sectors and large institutions.

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Unless otherwise specified, all information provided is sourced from CCID Consulting.

Ó 2008 CCID Consulting Co., Ltd.