21 Vianet Overview

21Vianet is the largest carrier-neutral internet data center services provider in China as
measured by revenues in 2012. They host customer servers and networking equipment and
provide interconnectivity to improve the performance, availability and security of internet
infrastructure. They also provide managed network services to enable customers to deliver data
across the internet in a faster and more reliable manner through an extensive data transmission
network and proprietary smart routing technology. Finally, they provide CDN (content
distribution network) services to improve the security, speed and quality of data transmission in
China. Public cloud services were first offered in 2013 and private cloud and hybrid services in
2014.
21Vianet operates 12 self-built data centers and 69 partnered data centers located in 43
cities throughout China, including all of Chinas major internet hubs with over 14,000 cabinets
under management that house over 76,000 servers as of December 31, 2013. Their transmission
network includes over 500 points of presence, or POPs, which are access points from one place
to the rest of the internet. Most of their data centers and all of their POPs are connected by our
private optical fibers network across China.
As a carrier-neutral internet infrastructure services provider, 21Vianets infrastructure is
interconnected with the networks operated by all Chinas telecommunications carriers, major
non-carriers and local internet service providers. They serve a diversified and loyal base of
customers, spanning many different industries and ranging from internet companies to
government entities, from blue-chip enterprises to small- to mid-sized enterprises. As of
December 31, 2013, they had 2,046 customers, including many leading Chinese and global
companies operating in China. Monthly recurring revenue from the top 20 customers in 2013 has
increased from RMB42.6 million in December 2012 to RMB45.5 million (US$7.5 million) in
December 2013.

Service Offerings
Revenues are primarily generated from providing hosting and related services and managed
network services.
Hosting and Related Services
Hosting and related services including the following:
Managed Hosting Services that dedicate data center space to house our customers
servers and networking equipment and provide tailored server administration services;

 Interconnectivity Services that allow customers to connect their servers with internet
backbones in China and other networks through our Border Gateway Protocol, or BGP,
network, or our single-line, dual-line or multiple-line networks;
CDN Services, or content delivery network services;
Cloud Services that allow businesses to run their applications over the internet using our
IT infrastructure rather than having the infrastructure on their own premises; and
Value-Added Services, including firewall services, server load balancing, data backup and
recovery, data center management, server management, and backup server services.
Competition
There is competition from a wide range of data center service providers, including:
Carriers. Competition from state-owned telecommunication carriers, including China
Telecom and China Unicom. According to IDC, carriers occupied 54.5% of the data
center services market in 2012. In addition, both carriers operate their own networks.
Competition is primarily focused on pricing, quality of services and geographic
coverage. Unlike China Telecom and China Unicom, which construct data centers
primarily to help sell bandwidth, 21Vianet provides connectivity to multiple networks in
through carrier-neutral data centers, providing superior choice and performance. The
private network provides enhanced connectivity among different networks. In
comparison, data centers operated by China Telecom and China Unicom generally
provide access only to their own network and are often constrained by their networks
coverage. Due to inadequate interconnectivity among Chinas carriers networks and
among the same carriers networks in different provinces, interconnectivity bottlenecks
remain a major problem, contributing to slow transmission speeds across services and
applications.
Carrier-neutral service providers. Competition from other carrier-neutral service
providers, such as ChinaNetCenter. Competition is primarily focused on pricing and the
quality and breadth of service offerings.
In-house data centers. Businesses may choose to house and maintain their own IT
hardware, such as Baidu and Alibaba, and other large enterprises, particularly in the
financial services sector. Due to their in-house capabilities, these customers may
outsource fewer services to other third-party data center services providers, if at all.
Cloud service providers. Cloud services are a new and emerging market and therefore,
competition from various market players who have entered into or plan to enter into the
new market. That being said partnership with Microsoft and IBM will make the
company attractive to potential customers, especially enterprise and government entity
customers that have a strong demand for cloud services.

Lastly, some companies would rather locate in Hong Kong as opposed to mainland China due to
the governments regulatory policies regarding the control of the internet.