IBM joins Tencent to target China's growing enterprise cloud market

The partnership will target small and medium businesses specializing in healthcare and smart cities

After partnering with Apple and Twitter for the enterprise market, IBM is doing the same in China with local Internet giant Tencent in a deal targeting growing businesses in the country.

The two companies are joining forces to deliver public cloud and software-as-a-service technologies to small, medium businesses working in the smart cities and healthcare industries, IBM and Tencent said Friday.

The goal is to help China's emerging businesses tap into more cloud computing and mobile tools to expand their reach, the companies said in a statement. For both IBM and Tencent, it also represents a huge opportunity to collaborate on selling their enterprise services to a major market.

By 2018, China's public cloud market could reach nearly US$20.7 billion, posting a compound annual growth rate of 31.5 percent, according to estimates from research firm Gartner.

But while customer demand picks up, many of the current cloud providers in China lack the experience their foreign counterparts possess, Gartner said in a report. At the same time, Chinese regulations effectively demand that foreign companies form joint ventures with domestic companies to provide cloud services in the country.

Microsoft took that step in 2012, forming a joint venture with Beijing-based 21Vianet to bring its Office 365 and Windows Azure software to China. In Dec. 2013, Amazon Web Services also did the same, and opened a data center in Beijing with local partners to host cloud services.

IBM is joining the party with Tencent, one of the country's biggest Internet companies best known for its social networking products including messaging app WeChat. But Tencent has also been active in the enterprise space, and been hosting cloud services for businesses in China.

In a statement, Tencent said the company has a "stable and reliable cloud computing platform, while IBM has abundant industry expertise aimed at the enterprise."

IBM said in an email it hopes to not simply offer services that will help customers migrate to the cloud, but also industry-specific technologies. Under the partnership, the U.S. company will provide consulting and support services to customers, while Tencent hosts the public cloud.

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Michael Kan

IDG News Service
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