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Chinese Server Market Development and Major Brand Analysis

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Chinese Server Market Development and Major Brand Analysis Industry Intelligence Program Computing Chinese Server Market Development and Major Brand Analysis Abstract Taking advantage of the rise of cloud and mobile computing, the server industry has been booming in the past few years. And the server industry, used to be led by US and European brands, has shifted focus to emerging markets rather than on almost saturated mature markets. Due to the opening of China and the government's preferential policies, Chinese server brands are growing at substantial rates especially four leading brands, namely Lenovo, Huawei, Inspur and Sugon. This report profiles the development of the Chinese server industry and gets a glimpse of how these four Chinese homegrown brands deploy their products and services. by Lucas Lee Document Code: SVRPT14011601 Publication Date: January 2014 Check out MIC on the Internet! http://mic.iii.org.tw/english SVRPT14011601 Chinese Server Market Development and Major Brand Analysis __________________________________________ i Table of Contents Page 1. Growth Driving Factors in the Chinese Server Market .................... 1 1.1 Rise of the Cloud Computing Market ................................................ 1 1.2 Online Shopping Frenzy ...................................................................... 1 1.3 Development of Next-generation Communications Technology .. 2 2. Cloud Computing Policy Development in China .............................. 2 2.1 Cloud Policy Management .................................................................. 2 2.1 Importance of Cloud-based Policy ..................................................... 3 2.2 Influence of Policy on Server Product Demand ............................... 3 3. Development of the Chinese Server Market ....................................... 3 3.1 Market Volume...................................................................................... 3 3.2 Chinese Server Branded Vendors' Shipment Share ......................... 3 3.3. Chinese Server Product and Service Development Trends ........... 4 4. Strategic Development of Major Chinese Server Brands .................. 5 4.1 Development Status .............................................................................. 5 4.1.1 Huawei ................................................................................................ 5 4.1.1.1 Introduction ..................................................................................... 5 4.1.1.2 Products and Services .................................................................... 5 4.1.1.3 Customer Relations/Market Positioning .................................... 5 4.1.2 Lenovo ................................................................................................. 5 4.1.2.1 Introduction ..................................................................................... 5 ©2014 Market Intelligence & Consulting Institute January 2014 SVRPT14011601 ii ____________________________________________________________ Industry Intelligence Program - Computing 4.1.2.2 Products and Services .................................................................... 6 4.1.2.3 Customer Relations/Market Positioning .................................... 6 4.1.3 Inspur ................................................................................................... 7 4.1.3.1 Introduction ..................................................................................... 7 4.1.3.2 Products and Services .................................................................... 7 4.1.4 Sugon ................................................................................................... 7 4.1.4.1 Introduction ..................................................................................... 7 4.1.4.2 Products and Services .................................................................... 7 4.1.4.3 Customer Relations/Market Positioning .................................... 7 4.2 Development Strategies of Huawei, Lenovo, Inspur and Sugon .. 7 MIC Perspectives......................................................................................... 8 Appendix ...................................................................................................... 9 Glossary of Terms ....................................................................................... 9 List of Companies ..................................................................................... 10 January 2014 ©2014 Market Intelligence & Consulting Institute SVRPT14011601 Chinese Server Market Development and Major Brand Analysis _________________________________________ iii List of Figures Page Chinese Server Shipment Volume, 2011- 2017 ....................................... 3 Worldwide Server Shipment Volume by Vendor, 2Q 2013.................. 4 ©2014 Market Intelligence & Consulting Institute January 2014 SVRPT14011601 iv ___________________________________________________________ Industry Intelligence Program - Computing List of Tables Page Chinese Cloud-based Policy Announcements, 2010 - 2012 .................. 3 Development Strategies of Huawei, Lenovo, Inspur and Sugon ........ 7 January 2014 ©2014 Market Intelligence & Consulting Institute SVRPT14011601 Chinese Server Market Development and Major Brand Analysis __________________________________________ 1 1. Growth Driving Factors in the Chinese Server Market 1.1 Rise of the Cloud Computing Market Cloud computing development has been thriving in the past few years, driving demands for cloud-based hardware, servers, storage systems, and connected equipment. Server shipment growth therefore remains buoyant. Mature markets like Europe and the United States are still growing rapidly but eyes are now also on the Asian emerging markets, led by China. Due to early developments, the construction of cloud-based infrastructures in mature European and US markets has been near completion. Even so, the cloud-based investment plans in mature markets continue on. For instance, Google announced in November 2013 that it would earmark an extra US$600 million for expanding the scale of its data center in Finland. Amid the continuous hardware investment, vendors have been shifting focus from hardware to software and services in pursuit of seamless integration between software and hardware. In emerging markets, where cloud computing development is still at the infancy, the focus has been leaning toward infrastructure deployment. 1.2 Online Shopping Frenzy The growing demand from Chinese online service providers are also one of key factors driving server growth. Corporate revenues of three online service providers, namely Alibaba.com, Baidu.com, and Tencent (qq.com), were all seen upward growth in 2013. For instance, the total revenue of Alibaba.com reached US$1.74 billion in the second quarter of 2013, up 61% year-on-year. Those three major online service providers have been actively expanding server rooms and purchasing server systems in response to growing demands caused by the increased subscriber base and network traffic volume. On Chinese Double-Eleven single day, for instance, had brought about sales exceeded 35 billion RMB (US$; US$1 = 6.06 RMB), breaking the records. On that day, the transaction amount on the Alibaba.com broke 100 million RMB (US$16.5 million) within one minute and ©2014 Market Intelligence & Consulting Institute January 2014 SVRPT14011601 2 ____________________________________________________________ Industry Intelligence Program - Computing 5 billion RMB (US$820 million) within 38 minutes. Within 24 hours, the number of transactions proceeded on Double-Eleven single day was approximately 171 million in 2013, representing 790,000 transactions processed per minute. In order to cope with the surging number of online users accessing its website, Alibaba had prearranged over 60,000 servers prior to the Double-Eleven day to share the load on the server-end. This has proven that the sale growth of Chinese online service providers is bringing demands for server systems. 1.3 Development of Next-generation Communications Technology 2. Cloud Computing Policy Development in China 2.1 Cloud Policy Management January 2014 ©2014 Market Intelligence & Consulting Institute SVRPT14011601 Chinese Server Market Development and Major Brand Analysis __________________________________________ 3 Table 1 Chinese Cloud-based Policy Announcements, 2010 - 2012 Institute Month Releasing Name of Policy Description Released Policy State Council MIIT, National Development and Reform Commission Ministry of Science and Technology MIIT MIIT MIIT State Council Ministry of Science and Technology Source: China's Cloud Computing White Paper, compiled by MIC, January 2014 2.1 Importance of Cloud-based Policy 2.2 Influence of Policy on Server Product Demand 3. Development of the Chinese Server Market 3.1 Market Volume Figure 1 Chinese Server Shipment Volume, 2011- 2017 Source: MIC, January 2014 3.2 Chinese Server Branded Vendors' Shipment Share ©2014 Market Intelligence & Consulting Institute January 2014 SVRPT14011601 4 ____________________________________________________________ Industry Intelligence Program - Computing Figure 2 Worldwide Server Shipment Volume by Vendor, 2Q 2013 Source: MIC, January 2014 3.3. Chinese Server Product and Service Development Trends January 2014 ©2014 Market Intelligence & Consulting Institute SVRPT14011601 Chinese Server Market Development and Major Brand Analysis __________________________________________ 5 4. Strategic Development of Major Chinese Server Brands 4.1 Development
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