September 11, 2012

China Cashes in on Cloud

Robert Gelber

It’s no secret that China’s economic development has been set to warp speed. Over a ten-year span, (2001-2011) the country’s GDP grew an astounding 550 percent. During the same time period, the US economy increased by just 50 percent. Given China’s dramatic growth, they appear to be focused on catching up with the United States in a variety of aspects including defense, technology and even Olympic medals. A recent flurry of announcements indicate that China is betting on cloud technologies, even besting some US providers at their own game.

Alibaba Outpaces Amazon, eBay

When it comes to Web-scale companies, like eBay and Amazon, China is no slouch. Founded in 1999, Hangzhou-based Alibaba has offered e-commerce services to Chinese consumers and businesses. The company is a collection of online marketplaces with B2B, C2C and B2C focuses. Similar to other online shopping platforms, Alibaba enables remote consumers to access the same goods and services as people in larger cities.

A few days ago, The Economic Times reported that Alibaba had surpassed both eBay and Amazon in gross merchandise volume (GMV).

“From their annual reports we did a rough calculation and we were similar last year but we are growing faster than them this year, so this year we are probably larger than them,” said Zeng Ming, the company’s chief strategy officer, when speaking of the US tech retail giants.

The number represents the total value of transactions processed using the company’s services. Back in 2009, Alibaba’s GMV was $33 billion. The company expects to reach $158 billion by year’s end.

Zeng says the Alibaba is focused on tripling its GMV over the next 5-7 years.

>> Next: China’s Number One Search Giant Makes Major Cloud Play



Baidu Invests 1.6 Billion in Cloud Computing

Baidu is currently the number one search engine in China and the fifth most visited site according to Alexa Web analytics. Beyond delivering search functionality, the company also delivers other services including:

  • Collaborative encyclopedia
  • Government Search
  • Entertainment
  • Social Networking

Baidu was incorporated in 2000, which is still fairly young in the tech industry, but plans to grow on its already solid footprint. The Chinese search giant is investing $1.6 billion towards the creation of a new cloud computing center. As revealed by Reuters, Baidu’s chief financial officer Jennifer Li made the announcement at the company’s annual Baidu World Forum event.

Specific details about the new facility are scant, but according to one news source, Baidu has confirmed it has already broken ground on a undisclosed site in the northern region of China. No completion date was given, but a company representative claimed that Baidu already operates China’s largest cloud service. The new site may have a role in supporting some features of the company’s new search service, which will be integrated into the next major revision of Apple’s mobile platform, iOS 6.

>> Next: Microsoft Bolsters Cloud Operations in China



Microsoft Plans to Add 1,000 Jobs in China

China’s booming economy is attracting plenty of foreign investment as well. To that end, Microsoft told IDG News Service that it plans to add 1,000 jobs to expand cloud operations in the country. The new employees will come as an addition to the 4,500 China-based positions already in place for the company. Along with the extra hands, Microsoft will up its Chinese R&D funding by 15 percent.

The investment will most likely aid promotion of the company’s cloud-based products, including Office365, Windows Azure and Server 2012. The Redmond giant estimates that 40 percent of China’s enterprise users are already using some form of the company’s private cloud software, and says it is working on a public cloud option for China.

Right now, 80% of the research Microsoft undertakes in China is aimed at the global market, but this is changing as the company ramps up its commitment to the local Chinese market.

When he announced the new strategy to a group of journalists, Ralph Haupter, chairman and CEO for Microsoft’s Greater China Region, characterized the new focus as “the most ambitious and audacious plan we have had for China in the last two decades.”

>>Next: CSA Looks to Increase Confidence in Cloud Computing



CSA Looks to Increase Confidence in Cloud Computing

Non-profit association Cloud Security Alliance (CSA) recently announced a memorandum of understanding with the Hong Kong Applied Science and Technology Research Institute (ASTRI). The groups are looking to boost cloud security measures while accelerating development of cloud technologies in Hong Kong and greater China.

First on their to do list is the creation of CloudCERT, a program that aims to improve the operation of Computer Security Incident Response Teams (CSIRT). Hong Kong will host the APAC CloudCERT base of operations.

“We very much welcome the opportunities to collaborate with CSA. I hope our joint effort can contribute to the advancement of cloud security and facilitate the adoption of cloud computing in Hong Kong and the region,” said Dr. Cheung Nim-kwan, CEO of ASTRI.

Security is a primary concern with current and potential cloud adopters. To make matters worse, building confidence requires long periods of time without incident. Success for CloudCERT will come in the form of a mostly unblemished track record established over a matter of years. In this way will established concerns about cloud computing eventually be unseated.

With all of these developments being announced within days of each other, it’s clear that China is cultivating its cloud offerings at seemingly breakneck speeds.

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