Foreign technology leaders aiding China's digitalization drive

Overseas cloud computing companies are beefing up their presence in China, in response to the country's stronger-than-expected digitalization demand.

With opportunities created by the country's increasingly digital economy, Chinese companies are embracing cutting-edge technologies to improve their corporate management and production efficiency.

Driven by this huge demand, US-based tech multinational Dell Technologies Inc said it is betting big on enterprise-level businesses incorporating cloud services into their growth plans in China.

"Digitalization is a key driver and enabler of transformation for companies in the Chinese market. It has become one of our largest markets globally," said Michael Dell, founder, chairman and CEO of Dell Technologies, at the company's tech summit in China in October.

Dell bought EMC for $67 billion in September 2016, which focuses on helping enterprise-level customers to build data center infrastructure. It also facilitates these customers' IT and digital transformation.

Dell EMC－created from the Dell Inc and EMC merger－recently launched its latest modular server, the Power-Edge MX, in China. The new product offers significantly improved performance to meet the heavy workload at both traditional and emerging data centers.

"In China, for China," Dell said. "We expect to help more Chinese companies to transform and become more digitalized to contribute to the Chinese economy."

China's software and IT sector growth accelerated in the first eight months of this year, according to the Ministry of Industry and Information Technology. The software industry reported profits of 492.4 billion yuan ($70.9 billion) from January to August this year, up 13.7 percent year-on-year, picking up pace from the 12.1 percent year-on-year growth reported last year.

The country's digital transformation, based on technologies including cloud computing, the internet of things and artificial intelligence, is expected to contribute 65 percent of China's GDP, said a report from International Data Corp.

"Such a promising prospect has and will create huge and valuable opportunities for both companies and industries. The Chinese market will continue to be one of our important markets globally," said Mark Russinovich, chief technology officer of Microsoft Azure, another leading cloud computing player.

Microsoft Azure tripled its cloud capacity and added two more cloud regions earlier this year to serve its 110,000 clients in the country. The move was an indication of stronger growth momentum in China, one of the world's largest IT markets.

"China is one of the most dynamic markets, where enterprises are pushing forward digital transformation, creating abundant growth opportunities," Microsoft CEO Satya Nadella said at a forum earlier this year, without disclosing specific investment figures.

"Go global, go China," Russinovich said, adding Microsoft is ramping up efforts to help companies both locally and globally, assisting Chinese companies to go overseas.

"It is inevitable that Chinese enterprises will encounter problems when going overseas, including in the areas of data storage and efficient data operation," said Zhang Zhenyuan, head of information technology at Spring Airlines, China's first and largest budget carrier.

"In Japan, Microsoft Azure has accelerated the speed of our website and reduced operating costs by more than 30 percent," he said.

China's cloud market is becoming increasingly crowded, with domestic and foreign companies competing aggressively. Both Dell and Microsoft's cloud expansion plans come as the companies are locked in fierce competition with Amazon.com Inc.

Amazon Web Services, Amazon's cloud service platform, has attracted leading Chinese companies Lenovo Group Ltd, TCL Corp, Midea Group and Xiaomi Corp, as well as fast-growing startups.

It has cooperated with Beijing Sinnet Technology Co to better serve local enterprises together. AWS mainly offers technical support, while Sinnet is responsible for operations and management, including investing in and constructing IT infrastructure.

Sinnet said it plans to expand its cooperation with AWS to enrich services in China, especially in the areas of the internet of things, mixed cloud and artificial intelligence.