Access to Dropbox has been restored in China for the first time since it was blocked in 2010. While users have periodically been able to share files and sync files from within the country, this is the first time in three years that Dropbox has been available and stable for a relatively lengthy period of time. Tech In Asia first noticed that the cloud storage was accessible last week.
But the Chinese government’s sudden decision to restore access to Dropbox isn’t a sign that the San Francisco-based company will enjoy a sudden uptick in business from Chinese users. For one thing, connection to overseas servers from China is painfully slow, as Tech In Asia points out. Furthermore, domestic cloud storage services providers have proliferated over the past few years, thanks in part to support from the Chinese government.
One of the earliest and biggest of these companies is Kanbox, which was founded in 2011 and built up a user base of more than 15 million users before being purchased by Alibaba in Sept. 2013 for an undisclosed amount. The acquisition will allow Alibaba to focus on expanding its cloud computing unit, which it launched in 2009, and power its mobile ecosystem, as well as products like Alibaba’s smart TV.
Other Chinese tech companies that have also launched cloud storage for consumers include Tencent, which started offering a whopping 10TB of free storage in November. Tencent, which is probably best known outside of Asia for owning WeChat, reportedly plans to make its cloud storage service, called Weiyun, available in the U.S. early this year. If it does indeed launch stateside, Tencent’s cloud storage may become a significant challenger to Dropbox, Box, and SkyDrive.
It’s difficult to pinpoint exactly why the Chinese government decided to restore access to Dropbox, and why it blocked it in the first place. One reason may be that it did not want people to share politically sensitive information over the service, which is why is cut off access to Facebook and Twitter. Blocking Dropbox may have also been part of an anti-competitive strategy. In 2009, just a year before it cut access to Dropbox, the Chinese government began investing heavily in cloud computing, and continues to do so. In fact, IDC expects that China will spend more than $1 billion by 2016.
But even though the Chinese government has set up public cloud computing projects–including the designation of Beijing, Shanghai, Shenzhen, Hangzhou, and Wuxi as pilot “cloud-computing cities,” the industry still suffers from several disadvantages, including complex regulations, a relatively immature ecosystem, and lack of planning.
This has left room for foreign competitors to step in and offer cloud services to local tech companies. Amazon recently announced that it would extend its Amazon Web Services product suite to China. Amazon will compete with Alibaba, but it says it already has “thousands” of companies on its client roster, including major players like Xiaomi, Qihoo 360, and Kingsoft.
The support of these companies, as well a memorandum of understanding with the Beijing and Ningxia governments, will help shelter Amazon from the obstacles faced by other Western tech companies as they expand in China.
Though Dropbox is available for now in China, the government could block access again at any time (Google Drive is still unavailable). But the company has done well without having a presence there. It recently closed a $250 million funding round at an impressive $10 billion valuation and is rumored to be planning an IPO. Competitor Box has also reportedly filed for an IPO. If either company goes public, they’d have the resources to battle against Chinese competitors that bring their cloud storage services to the West.
Image by Flickr user Karin Dalziel under a CC BY 2.0 license.
