by Juliana Kenny
U.S. technology companies have dominated the global cloud computing scene, particularly cloud giants like Amazon Web Services and Google. But China’s cloud computing market is slowly building momentum, and Chinese tech giants are making headway into a market that they have the power to significantly change.
Various deals between major U.S. tech companies and Chinese businesses are paving the way for more cloud growth, while some companies have worked on creating cloud infrastructures alone. Last week, IBM revealed that it acquired a big contract from a security financial data provider company based in Shanghai named Shanghai Wind Information. The partnership will work in risk analysis of the data available in the public domain as Shanghai Wind Information makes its information publicly available to IBM’s cloud for risk analysis without installing actual IBM servers.
This is a big step for China-based companies which are traditionally not just leery of American cloud firms, but openly opposed to working with them. IBM’s deal opens a door for U.S. cloud companies to partner with Chinese groups and bridge the markets.
Another move last month by VMware has opened the portal between U.S. and China cloud business. VMware announced that it will work with China Telecom to build a hybrid cloud service to be operated by the state-owned company, which also happens to be China’s biggest cloud service provider.
These partnerships are unique considering the tenuous Chinese-American relationship when it comes to cyber security. Both countries have accused each other of hacking into government websites and trying to retrieve and/or destroy data from each other’s native networks, particularly after Edward Snowden’s leaks about the NSA’s data collection practices.
Alibaba, China’s largest e-commerce company, has developed its own cloud computing business, which is growing in reach and use in the country. Alibaba’s businesses are of interest to U.S. companies because of its pending IPO. The New York Times reports that documents filed with the Securities and Exchange Commission ahead of Alibaba’s proposed public offering note that the company saw revenue of $102 million from cloud and infrastructure sales last year — an increase of 26% from a year earlier.
While the extent and power of China’s cloud businesses does not currently even come close to Amazon Web Services’ prowess in the market, the landscape of global cloud is likely to shift a bit over the next several years. There is no doubt that — especially with the partnerships of American companies like IBM and VMware — China’s cloud businesses are advancing onto the global cloud scene.