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A big cloud on the horizon proves to be good news in computer industry

Global data-storage suppliers are looking at China's small and medium-sized enterprise (SME) market as demand surges on the back of a rise in cloud computing.

"The data quantity in medium-sized companies has seen an average increase of 59 percent annually. Demand could be huge in the next three to five years," said Adrian Chan, president of NetApp Greater China.

NetApp Inc announced new data-storage ideas in late 2011, targeting mid-sized companies - an emerging market that helped to generate one third of NetApp's global revenues during the fiscal year 2011.

Revenue contributed by medium-sized enterprise clients grew by about 24 percent from December 2010 to November 2011, according to a company statement.

About 70 percent of Chinese executives say swift growth in data was one of the major challenges in the information-storage sector, according to a survey released by the Massachusetts-headquartered research company International Data Corp (IDC) in late October 2011.

However, Chinese SMEs are finding ways to cut expenses amid growing concerns about the impact of global economic uncertainties, a move that may hinder storage suppliers' profit margins and aggravate competition.

As the global economic crisis worsened, the World Bank lowered China's gross domestic product expected growth to 8.4 percent for 2012.

"If the economic crisis blew up in China, SMEs will be the first to suffer losses," China Enterprise News reported on Jan 3, citing Fan Gang, director of the National Economics Research Institute at the China Reform Foundation. When the economic situation turns bad, one of the few options left for SMEs is cost saving.

The Bank of China also estimated in December that the country's GDP growth for 2012 is likely to hit 8.8 percent, lower than 2011's estimation of 9.3 percent.

"Clients chose NetApp because of its flexibility and efficiency," said Johnson Chiu, the company's Greater China channel and alliance director. NetApp claimed on Nov 30 that it has managed to save more than 4.6 exabytes of storage space for its customers, saving costs of up to $11 billion.

An exabyte is a unit of information or computer storage equal to one quintillion bytes. A quintillion is 1,000 raised to the power of six. A UC Berkeley School of Information study estimated that by the end of 1999, the sum of human-produced information (including all audio, video recordings and text/books) was about 12 exabytes of data.

NetApp also plans to further promote its products in second-tier cities such as Xi'an, Ji'nan and Shenyang, according to Chan. "The company is experienced in the mid-sized enterprise market and, with the help of our partners, we have been able to build new products to service our customers in China," he added.

But NetApp is not in the market alone. EMC Corp, one of NetApp's most powerful competitors internationally, announced in August that it will create a new department at its China arm to specialize in mid-end market promotion.

"EMC will pay more attention to China's SME clients, paving the way for the company to become the No 1 supplier in the country's SME data-storage business," Mei Minling, director of EMC's Greater China market and channel strategy, told Chinese IT website earlier last year.

Mei also pledged to double the pace of development in China's second- and third-tier cities, including establishing new subsidiaries and beefing up sales teams.

Meanwhile, other data-storage suppliers, such as Hitachi Data System Corp (HDS), also mulled ambitious plans in the market.

HDS, a subsidiary of the Japanese multinational conglomerate Hitachi Ltd, said it is interested in grabbing more market share among China's SMEs by utilizing the company's cloud-computing technology.

Last year, Hitachi helped Beijing Computing Center (BCC) to set up a cloud-based data storage pool in a bid to meet the growing sector. "Our Beijing Industrial Cloud Service Platform needed to have a robust storage infrastructure that could provide unsurpassed reliability, performance and scalability," said Wu Yilei, a researcher in the research and development department at BCC.

"HDS is keenly focused on simplifying and accelerating our customers' cloud environment while protecting their IT investments," said John Mansfield, senior vice-president in the company's global solutions strategy and development department.

"In today's fast evolving and economically challenging business world, IT organizations must spend less time configuring and managing individual devices or applications and dedicate more time developing, delivering and enhancing new services," said Richard Villars, vice-president of storage and IT executive strategies at IDC.

Data storage suppliers who can provide converged data center solutions will play a "critical role" in the data center transforming process, Villars added.

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