New technology to power, shape China's industrial transformation

China's cloud-computing market is seeing an "explosive increase" and will continue in similar fashion until at least 2015, according to industry experts.

"The nation's more than 550 million netizens and tens of millions of companies are set to generate tremendous demand for the cloud-computing industry in the next three to five years. The cloud will power China's transformation and upgrade processes across every industry," said a report released by CCWResearch, a think tank for China's IT industry watchdog.

Chinese e-commerce giant Alibaba Group promoting its net.cn cloud-computing service at an Internet exhibition. In 2011, Alibaba announced plans to develop a cloud-based operating system for smartphones. [Photo / China Daily]

 

Cloud computing will help companies reduce employment, contracting, acquiring, testing and maintenance costs. Hence, investment in this technology will help companies save money in the long run, said Paul Dean, managing director of global consultancy firm Accenture's technology department in Shanghai.

The number of Chinese companies launching cloud-computing projects last year was unprecedented, analysts said, although no data was available.

These companies invested roughly 18.8 billion yuan ($3 billion) on new cloud-computing facilities in 2012, a 48.1 percent year-on-year growth, said CCWResearch, adding cloud-related services contributed another 94.7 billion yuan to the industry.

Heavy investment is expected to push the annual growth rate of the industry five times faster than the average level of the IT industry, it said.

"Cloud computing may create approximately 5 million job opportunities and more than 2.2 trillion yuan in output value across different industries in the next four years," CCWResearch estimated.

Cost benefits

"For a company that has diverse subsidiaries and a sophisticated corporate structure, cloud computing is the best solution to improve communication costs," said Guo Song, chief information officer at Xiamen CCRE Group Co, a Fujian-based manufacturing conglomerate and the parent company of China's passenger carriage flagship Xiamen King Long Motor Group Co.

The group recently finished building a grassroots-to-boardroom information platform that links its more than 20 subsidiaries. A corporate cloud-computing center is the core of this platform.

That the game is on for cloud service providers is more than evident as more companies are showing an interest in the technology on hopes that it will help reduce operational costs and increase productivity amid the gloomy global economic environment.

"Cloud is the key technology to break through the current economic stage for China," said Ralph Haupter, vice-president of Microsoft Corp, chairman and CEO of Microsoft Greater China.

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