Gartner said that by 2019, two-thirds of data center IT infrastructure spending in China will be obtained by local Chinese vendors.

"Over the last two decades, global data center infrastructure vendors have enjoyed high growth rates in China. However, the situation is changing," said Jimmie Chang, principal research analyst at Gartner.

"Especially after the Prism affair, the Chinese government has been encouraging government institutions and state-owned enterprises to purchase from local vendors. At the same time, a media-hyped campaign, so-called 'IOE Out,' is targeting a reduction on the reliance of global IT vendors in Chinese enterprises."

Mr. Chang said that Chinese enterprises are also not satisfied with global vendors' premium prices for professional services, maintenance renewal and spare components. They also often require more localization and customization than global vendors can usually offer. These factors are reshaping the competitive landscape of the data center IT infrastructure market.

"Global data center infrastructure vendors are losing their dominant position because of these pronounced changes in market climate," said Mr. Chang.

"This trend is particularly strong in the server market, where many local vendors are rapidly cannibalizing global vendors’ share. In the storage market, Huawei, the leading local storage vendor, will be competitively challenging EMC’s top storage vendor position in China in the near future. Cisco is also losing share to local vendors and the trend looks likely to continue.”

Gartner recommends that regional leaders at global vendor companies should develop a full set of local strategies in China, including product designs, marketing messaging, business models, selling tactics, culture and contract terms, together with a comprehensive understanding of the differences rather than similarities of the Chinese market.