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Companies' future is in the cloud (2)

By Gao Yuan (China Daily)

08:17, January 21, 2013

Chinese e-commerce giant Alibaba Group promoting its cloud-computing service at an Internet exhibition. In 2011, Alibaba announced plans to develop a cloud-based operating system for smartphones. (Nan Shan / For China Daily)

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.

Cloud computing gives growing economies, which always struggle to find a balance in the rapidly changing economic environment, an efficient tool to optimize their investment while enjoying a high degree of flexibility, he said.

"These advantages will encourage more enterprises to adopt cloud technology, thereby limiting the decision-making risks. Through cloud-computing centers, customers will able to move statistics to the cloud, and then choose whatever data they want," said Haupter. "It also gives executives flexibility from the perspective of productivity and data application."

In September, Microsoft launched Windows Server 2012, a cloud-based server operating system targeting small- and medium-sized enterprises.

The company is also mulling on introducing Windows Azure, its cloud-computing platform, in China.

"You have to really be careful while addressing the Chinese market, as it is important to fully understand the prevailing conditions in the local market," said Haupter. "You have to pick an area that is in line with the government's long-term development strategies."

On July 9, China announced its support to seven major emerging industries that are considered important for the overall growth strategy. The information technology industry is a part of this agenda, while cloud computing is a key area under it.

The government plans to encourage innovation in the cloud-computing industry and also set up labs to speed up its business use.

More than 600 Chinese cities will upgrade their IT infrastructure to spur domestic consumption during the 12th Five-Year Plan (2011-15). The Smart City idea is set to boost emerging Internet services such as "the Internet of things" and cloud computing.

"Local governments are set to push the development of the cloud-computing industry because they hope this new technology will help the government boost efficiency and better analyze the increasing amount of unstructured statistics," said Adrian Chan, Greater China president of NetApp Inc, a United States-based data management company.

"In addition, the nation's small- and medium-sized enterprises will also need this technology to rein in increasing costs and improve service levels," said Chan.

Last year, NetApp teamed up with Microsoft to set up a cloud-based information platform for Jin Jiang International Hotel Management Co, the nation's top hotel management company.

The new platform has simplified the maintenance process and improved the reliability of the system, according to Jin Jiang Hotel. But it did not disclose how much operating cost the new platform helped save because the system was just put into use.

SMEs are the most ideal candidates for cloud services, as they enable firms to make flexible IT input in the most cost-effective manner, said Dean from Accenture.

Cloud services, in essence, are the ability to source, scale and deliver capacity, and are not bound by physical location or labor, Dean said.

"The ability to make use of a resource no longer depends on the ownership of that resource. This means that IT must transition its provider centric role of building, implementing, managing and supporting solutions it develops in-house to one that provides standardized solutions customized to the business function provided by external parties," he said.

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