Taiwan Firms Best Poised to Benefit from Cloud Computing Boom

By Taiwan External Trade Development Council taitra, PRNE
Sunday, October 23, 2011

TAIPEI, Taiwan, October 24, 2011 -

- Government plans to export cloud solutions to global markets including the Middle East.

The worldwide cloud-computing market is expected to be worth more than US$400 billion by 2012, with Taiwanese ICT firms best poised to benefit from the boom. That’s according to a May report issued by Morgan Stanley listing — Taiwan’s Quanta and Wistron as the most likely companies to do well. Moreover, Taiwan’s government has said that it eventually plans to export the island’s cloud solutions to other markets, including the Middle East.

The Morgan Stanley report said that as companies shift from on-premise to managed or public cloud environments, x86 server share leaders Dell and Hewlett-Packard are at risk of losing market share to Asian original design manufacturers (ODMs) such as Quanta and Wistron, which ship servers directly to some of the largest cloud services vendors. x86 refers to a group of instruction set architectures based on the Intel 8086 CPU.

“We see a significant shift in the competitive landscape between on-premise server sales, which typically benefits the top three x86 server OEMs — Hewlett-Packard (HP), Dell, IBM — and the managed or cloud server sales, which increasingly benefit ODMs in Asia, including Quanta and Wistron,” said the brokerage.

Morgan Stanley said it believes the effects of changing cloud computing business will cause HP and Dell to grow more slowly than the overall server market over the next several years, which gives promising prospects to Quanta and Wistron. The brokerage said that Quanta, the world’s largest contract laptop maker, is predicted to double its server sales year-on-year, accounting for 5 percent of total sales and 10 percent of profits at the end of 2011. The Taiwan firm has predicted servers for cloud computing and tablet PCs will take a 30 percent share of its total revenue in 2011 compared with the 20 to 25 percent in 2010.

The brokerage also projected that server sales of Wistron, Quanta’s smaller rival, would start to show stronger momentum in the second half of this year, growing at least 20 percent year-on-year in 2012.

Taiwan’s government, meanwhile, has seized the opportunities that cloud computing presents, setting the sector as one of Taiwan’s top four smart industries to bring business potential to the island. In line with these policies, the Information Technology Research Institute (ITRI) recently unveiled Cloud OS, Taiwan’s first locally developed “all-in-one” cloud computing operating system. The OS was built by ITRI in cooperation with Inventec and Wistron. The research institute said that the system is based on open architecture and includes a hardware and virtual recourse management system, data storage and management system, as well as an information security and protection mechanism. The OS allows businesses to build and integrate their cloud computing data centers without fail, while in the process saving considerable costs on data center construction.

ITRI said that Taiwan’s state-of-the-art achievements in ICT hardware developments will allow local companies to better satisfy larger international customers while affording the island a more strategically advantageous position in the global cloud-computing industry.

Economic Affairs Minister Shih Yen-shiang has said that with its maturely developed ICT industry and the new Cloud OS, Taiwan will soon become one of the world’s most important cloud computing bases. And the Department of Industrial Technology under the Economic Affairs Ministry has said that once the technology advances to a certain level, the government hopes to export cloud solutions to global markets, including the Middle East.

According to a recent survey conducted by HP in collaboration with Coleman Research Group, 85 percent of companies polled in the Middle East are planning to implement some form of cloud in the next year, whether it is public, private or hybrid cloud. The research focused on a range of sectors in the region including finance, communications, media and oil and gas.

Meanwhile, 27 percent of survey respondents said their investment will go into mobility. That’s as ME companies are looking at how they can use the cloud to enhance the mobility for their workforce, customers, clients or citizens.

    Quanta Computer www.quantatw.com/
    Corporation     www.wistron.com/
    Corporation     www.inventec.com/
    ITRI            www.itri.org.tw/

About Taiwan External Trade Development Council (TAITRA)

The Taiwan External Trade Development Council (TAITRA) was founded in 1970 to promote Taiwan’s foreign trade and competitiveness in world markets. Over the past 40 years, TAITRA has played a key role in the development of the Taiwan economy. TAITRA is jointly sponsored by the government and commercial associations and is viewed by all as the business gateway to Taiwan for the international business community. Please visit www.brandingtaiwan.org or www.taiwantrade.com.tw for more information.

Media Contacts:

GolinHarris (Taiwan):
Jonathan Seidman
Tel: +886-2-2722-5369 ext 124
Mobile: +886-0936-513-749
Email: jseidman@golinharris.com

Michelle Wu
Phone: +886-2-2725-5200 ext. 1319
Email: michellewu@taitra.org.tw


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