IBM Shanghai Lab's chief Andreas Kind sees opportunities in cloud computing in China. Photo: Wu Nan

IBM plans to offer analytical cloud computing services to meet growing China demand

Published: 1:45pm, 27 May 2015

IBM sees opportunities to combine enterprise data and analytics in sectors such as finance, insurance, mobile, social networking and banking into a cloud computing service that meets growing demand in China.

The strategy comes as China embarks on its Internet Plus policy, announced by Premier Li Keqiang in March, which calls for a further expansion of cloud computing as well as other areas including online banking, mobile Internet and e-commerce.

China’s financial industry invested 50.5 billion yuan in internet-related technologies in 2013, according to a report by consulting group iResearch. It forecast that investment will expand to 60 billion yuan by 2017 under Internet Plus.

“We offer flexibility for clients to combine private and public cloud into a data centre and allow the client to quickly launch and manage the cloud,” said Andreas Kind, head of IBM’s Shanghai Research Laboratory. “There’s still a lot of demand in China.”

He added that IBM has developed a cloud app called Bluemix that can give clients in the cloud different tools to be able to co-develop from the different parts of the world.

IBM's total revenue from cloud services was US$7.7 billion for the 12 months to March 2015. Cloud revenue grew over 60 percent in the first quarter of 2015. Chief Executive Ginni Rometty said in February that the company will shift strategy to focus on cloud, big data, analytics, mobile, social and computer security. It aims to drive its sales from those sectors from $25 billion in 2014 to $40 billion by 2018.

The company has a long history of research into artificial intelligence, from chess-playing computer Deep Blue which defeated then world champion Garry Kasparov in 1996 to the Watson supercomputer, which has explored areas from cooking to cancer care. IBM has said Watson will focus more on cloud computing from now on.

In China IBM will come up against local technology giants Baidu, Alibaba and Tencent, which have all developed cloud computing technology with different focuses.

Baidu has invested heavily in artificial intelligence, using it in its advertising system to measure what qualities of an ad make people want to click on it. It is also applying the technology to a self-driving car. Its Minwa supercomputer recently beat ones from Google and Microsoft in an annual image recognition challenge.

Baidu cloud now has 200 million users, two years after the service was launched.

Aliyun, the cloud service run by Alibaba, provides services to banks, hedge funds and other financial institutions and enterprises. It recently signed a deal with Dubai-based holding company Meraas to provide governments in the Middle East and North Africa with cloud services.

IBM and Tencent already have a link in enterprise cloud computing through a venture between IBM’s SoftLayer cloud hosting service and the Chinese firm.

This article was corrected to say that IBM's total revenue from cloud services was US$7.7 billion in the year to March 2015. The figure was not a forecast for 2015.

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