IBM and Wanda team to bring cloud services to China

IBM is sure expanding its cloud footprint beyond the American shores. The latest agreement is with a Chinese company called Wanda, under which IBM will bring more of its services to China.

Both these companies have entered into an agreement to create a new company called Wanda Cloud, that is expected to become operational by 2018. Through this new venture, IBM will offer select cloud infrastructure and PaaS technologies in China.

The newly-formed Wanda Cloud will license IBM technologies and implement them in Wanda-owned data centers. In addition, Wanda Cloud will also sell and distribute these cloud services to companies and individuals, and at the same time, will ensure that their offerings meet the Chinese regulations. The revenue from Wanda Cloud will be shared by IBM and Wanda, though the exact percentage has not been released by the IBM spokesperson.

Wanda Group of companies is a large conglomerate that is mainly engaged in commercial properties, culture and finance. In 2015, the assets of Wanda Group was a 634 billion Yuan while its revenue was  290.16 billion Yuan. In fact, this is the world’s largest real estate enterprise and is the biggest five-star owner in the world. Besides real estate, Wanda Group is also the largest cultural enterprise in China and also, the world’s largest cinema operator. In addition, it also the world’s biggest sports company.

Last year, it spun a new company called Wanda Internet Technology Group to make a foray into the Chinese technology market that is currently dominated by only a handful of well-known names. This agreement is likely to give a big boost to the Wanda Group as it plans to expand into the technology sector in a big way.

As for IBM, this partnership can strengthen its grip over the Chinese market, where American companies have to enter into agreements with local Chinese companies to offer their services. Already, it had  entered into an agreement with another Chinese company called 21Vianet to bring cloud services to China. This partnership is expected to expand its reach in a market that has virtually unlimited potential.

Currently, Alibaba is the largest cloud service provider in China. When Wanda Cloud becomes operational by next year, we can expect the competition to stiffen a bit in the Chinese cloud market, thereby threatening the dominance of Alibaba in this market area. For its part, Alibaba is looking to expand to other regions in the world to take on competition from giants like AWS, as it feels fairly secure in the Chinese market.

This partnership between IBM and Wanda Group, revealed during IBM’s Interconnect tech conference in Las Vegas, comes as a big surprise to many people. Nevertheless, it is sure to augur well for both IBM and Wanda Group, not to mention the many Chinese companies and individuals who can benefit from it.

According to research firm Canalys, the cloud storage market is expected to reach $135 billion by 2020, so it’s little wonder that all major companies are vying to get a lion’s share from this market.

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Lavanya
Lavanya Rathnam is a professional writer of tech and financial blogs. Creative thinker, out of the boxer, content builder and tenacious researcher who specializes in explaining complex ideas to different audiences.
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