IT services vendor takes China Internet quirks in stride

Many of ChinaNetCloud's customers are online gaming companies, partly because they often need to find more servers quickly if a popular new game starts reeling in many users, Mushero said. A company in such a situation can scale up quickly by starting to use servers from a cloud, which ChinaNetCloud can provide, he said. The company also serves enterprise customers.

The growth of Internet companies is helping fuel China's IT services market. That market is set to grow by at least 20 percent each year for the next few years, said Jens Butler, a principal analyst at Ovum. Incentives from the Chinese government such as tax breaks and investment in technology parks are also boosting the sector, Butler said.

Internet companies face more practical challenges in China than they might in a developed market like the U.S. One challenge is that China's major communication networks are not well connected, including the two networks that separately cover the northern and southern parts of the country, Mushero said.

China also keeps a separate student network that covers university campuses. An Internet company needs servers on each network to offer services to its users, Mushero said. It also needs specially placed servers to offer services via the country's mobile networks, he said. China's three big mobile carriers are all state-owned and have autonomous branches in each province, further complicating business with them.

Links can be purchased between China's separate networks. But companies that, for instance, want to reach both northern and southern China must have separate IP (Internet Protocol) addresses on the two regional networks, which also raises new needs in the domain name system (DNS), Mushero said. The DNS is what directs Internet users to a Web site's correct IP address when they type in a domain name like idg.com.