China Cashes In on Storage Vendors

EMC, VMware, and Cisco all announced plans to pump money and resources into China today, underlining that country's growing importance in the storage market.

This morning, EMC opened an R&D facility in Beijing, and revealed plans to double its annual investment in China, targeting $1 billion a year by 2012.

EMC already has an R&D center in Shanghai, which is home to around 250 EMC employees, and CEO Joe Tucci announced plans to recruit an additional 200 in Beijing during a press conference in the Chinese capital earlier today. In total, the vendor expects to employ around 1,000 people across China by the end of this year. The Beijing facility is located in an area called Zhong Guan Cun, which is known as China's Silicon Valley.

In a statement released this morning, EMC said the Beijing R&D center will focus on technologies such as content management, archiving, security, and virtualization.

EMC spinoff VMware is also getting in on this act, identifying its own window of opportunity in the world's most populous country. Six months after setting up its own 35-person R&D team in Beijing, the virtualization vendor plans to increase its presence in China to 350 by 2009, according to media reports today.China has certainly been making its presence felt in the storage market over recent months, thanks largely to a series of joint venture deals between U.S. firms and their Chinese counterparts. Earlier this year, for example, Symantec and Huawei teamed up to deliver products worldwide, and, more recently, FalconStor and the Chinese Academy of Sciences (CAS), joined forces to deliver managed storage services.

Huawei, which is backed by the Chinese government, has also forged partnerships with U.S. firms FalconStor, Intransa, iVivity, and Xyratex.

Chinese vendors are already looking to sell their wares on this side of the Pacific, with H3C, the Chinese subsidiary of 3Com, unveiling its iSCSI product line at the SNW show in Dallas last month.

Another vendor looking for a piece of the action in China is Cisco, which announced its own expansion plans for China today, doubling its investment in the country to $16 billion over the next five years.

This initiative includes a memorandum of understanding with the China Development Bank, which is one of Huawei's financial backers, to examine joint investment opportunities and the establishment of SMB research teams within China.Cisco's decision to bulk up its presence in places such as China and India reflects current buying patterns in the storage market, according to Lehman Brothers equity analyst Inder Singh. "Strength has continued in emerging markets with EMEA strong and the Asia/Pacific region solid," he wrote in a note released this morning, explaining that this is helping offset "lumpy" U.S. enterprise spending.

China's storage growth is being fueled by a government desperate to establish the nation as a technology superpower. The Chinese government, for example, hopes to overtake the U.S. in terms of Internet users within the next two years and is rolling out a slew of technology projects designed to haul the country's 1.3 billion citizens into the 21st century.Have a comment on this story? Please click "Discuss" below. If you'd like to contact Byte and Switch's editors directly, send us a message.