The Virtual Discovery of China
Posted on April 8, 2008
Filed Under China Business, China Distribution, Cloud Computing, Mobile |
vnunet reports:
Virtualisation software and service vendors will be making $1.35bn a year in the Asia-Pacific region within two years, analysts report.
The market is growing at a rate of 42 per cent annually, according to Springboard Research. Three-quarters of the revenue will be earned from services, with software generating between one third and one quarter.
…However, many fear that the technology is not mature and that its introduction will raise new management and security challenges, according to Barnes.
An IDC study last year found that the majority of data centres in the Asia-Pacific region had yet to install any significant virtualisation technology. For example, 83 per cent in China and 73 per cent in India were not using the technology.
Virtualization, where multiple “virtual” computers run on the same single hardware platform, had a big year in China in 2007. 2008 is shaping up to be a nice little bloodbath between vendors.
Lenovo will support and sell Citrix’s XenServer solution for its servers. XenServer will be integrated into Lenovo’s server management tools. While international vendors such as HP, Dell, and IBM dominate the Chinese server market, Lenovo is the domestic competitor best positioned to make into the top tier. The deal is limited to the China market.
Another virtualization vendor, Parallels (formerly SWSoft), signed a similar deal with Inspur in the fall of 2007:
SWsoft first started hawking its unique, non-hypervisor based virtualization software in China back in late 2005. It has seen 300 per cent growth in the past two years with software localized (simplified and traditional Chinese) for the Chinese market, according to SWsoft CEO Serguei Beloussov.
Beloussov sees the deal with Inspur and focus on China as a continuation of SWsoft’s ‘do what VMware isn’t’ strategy.
“If you think about it, we always try to compete with VMware by going places VMware is not,” Beloussov told us. “We did software for the Mac, service providers, specific workloads and specific geographies.”
They’ve added the Chinese Linux distro developer Red Flag Linux as a reseller for its Linux-based virtualization tool.
But EMC’s VMWare isn’t quite out of the running in China. VMWare, the leading virtualization software firm, came to China in 2007 and has high expectations. Mike Clayville, its AP VP, in China Daily:
In China, Clayville says the company had “triple-digit growth” last year because of an “increasing recognition of virtualization”. He says the company will enhance its cooperation with local partners in China and plans to expand its 35-member research and development team in Beijing to 350 in the next 18 months.
“Triple-digit growth” is, of course, not too difficult when you’re starting from zero. EMC recently formed a joint venture with Digital China, so I imagine VMWare will tag along.
The primary challenge for virtualization vendors isn’t really unfamiliarity with the technology or concerns about its efficacy, it’s in implementation. Implementing and managing a virtual environment is remains uncommon in China. Vendors who provide the training to go along with the technology will be in a better position to gain market share.
And that’s where Microsoft enters the fray. Although their virtualization technology isn’t as mature as the likes of Parallels and VMWare, they have enormous resources in China to train resellers and in-house administrators on the technology. Their latest and greatest virtualization platform, Hyper-V, is a beta add-on to the now-shipping Windows Server 2008.
Meanwhile, in Wuxi, Jiangsu Province, a couple of hours to the west of Shanghai, IBM is looking at virtualization from a different perspective. Sys-Con reports:
IBM today announced it will establish the first Cloud Computing Center for software companies in China, offering emerging Chinese software companies the ability to tap into a virtual computing environment to support their development activities. It will be established, the company said in an announcement, through an agreement signed today between IBM and Wuxi Tai Lake Industry Investment and Development Company Limited.
…Companies in the park will be able to access these common services provided by the center at any time — just as they use utilities and other shared services. The technologies being offered to the community include IBM Rational software development tools, WebSphere Application Server software and DB2 database software running on IBM System x, System p and BladeCenter servers. IBM Tivoli systems management software will manage the cloud computing environment.
As opposed to virtualization in the data center, this is virtualization of the data center. The service is limited to firms in the software park and it seems to be a tidy package of IBM technology rather than an open platform for installation of any 3rd party software. It’s a package service (just like a utility) available to software firms big and small in the park.
This is the virtualization story that’s really important. In the next few years, in China and elsewhere, connectivity will become far more pervasive via various 3G and 4G technologies. The focus on the ramifications of this have all been in the consumer space. “Won’t it be wonderful to watch TV on a two-inch screen”, “I’m finally able to listen to digital radio on my mobile”, or some other such nonsense.
But if you add the power of cloud computing to that network, with access to virtualized resources, then people really can begin to work anywhere. Companies may not really need racks and racks of servers and storage. Computing power to store, retrieve, and manipulate data is on demand rather than siloed in depreciating boxes.
IBM’s small step in Wuxi portends a very different, and very disruptive, model for not only how solutions will be developed, but how they will be used.
Too bad Wuxi isn’t on the list for TD-SCDMA anytime soon.
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Is the $1.35bn the value of software or money that can actually be collected ?
I assume that means total revenue in Asia-Pacific for all virtualization solutions, including software sales and services.
I don’t think that revenue in China will see the same 75-25 split between services and software sales. Outside enterprises, Chinese companies are pretty reluctant to spend on services. They typically view services as part of the purchase price for a solution.