Trends in Cloud Computing
in China
State Street Hangzhou
June 2014
Prepared by: Jerry Cristoforo
© 2014 State Street Corporation ALL RIGHTS RESERVED
Limited Distribution
During our meeting today we will make forward-looking statements.
Any statement that refers to expectations, projections or other characterizations of future events or circumstances is a forward-looking statement, including those relating to market position, market growth, product sales, industry trends, supply chain, future memory technology, production capacity, production costs, technology transitions and future products. This presentation also contains forward-looking statements attributed to third parties, which reflect their projections as of the date of issuance.
Actual results may differ materially from those expressed in these forward-looking statements due to a number of risks and uncertainties, including the factors detailed under the caption “Risk Factors” and elsewhere in the documents we file from time to time with the SEC, including our annual and quarterly reports.
We undertake no obligation to update these forward-looking statements, which speak only as of the date hereof or as of the date of issuance by a third party, as the case may be.
Forward-Looking Statements
Agenda:
About State Street Hangzhou
China Context
China Trends
© 2013 State Street Corporation ALL RIGHTS RESERVED Highly Confidential Page 3
• Hangzhou: the capital city of one of
China’s most developed provinces
（
Zhejiang)
• Frequently rated as China’s Happiest
City
• An ancient city with rich culture and
over 2000 years of history
Zhejiang University
• One of China’s oldest universities; Founded in
1897
• In top three universities in China
• Computer Science College and related:
3000 Ph.D., Master’s, and Bachelor’s
degrees holders graduate annually
•
Research Area
•
Graphics and Virtual Reality
•
Machine Learning & Pattern Recognition
•
Multimedia Understanding and Retrieval
•
Data Mining & Database
•
System Software
•
Software engineering
•
Applications
•
Others
•
Theory, Networking, Product Innovation
Design……
Reasons for Rapid Growth
Innovation Triangle
如何规划良好策略
Innovation Triangle
政府
Hangzhou 杭州
Launched a reengineering project of
Stock Trading System with 15 engineers
in 2001
More than 30 projects (DEV, QA and
Support) ongoing with 150 engineers in
2004
Established wholly-owned subsidiary, State Street Hangzhou, by acquisition of Insigma State Street
team in 2005
Established Joint Venture company, Hengtian, to provide technology services in 2005
China market penetration and local product support in 2008
China has the world's largest Internet user base, and mobile is the
access platform of choice for most of those users.
China is on the fast track of adopting platform innovation, big data
technologies, mobility and e-commerce
China economy focusing on the domestic market and consumption
China Context
Cyber Security Concerns
Pre-Snowden
Y2003 Beijing and Redmond settle dispute over security concerns with MS Windows when Redmond agrees to
share the source code with Beijing.
Y2012 - Washington states telecom equipment from Huawei and ZTE posed a national security risk, and, at the same time, effectively banned US companies from importing equipment from the two Chinese firms. Beijing views Washington’s moves as controversial and contrary to fair trade principles.
Beijing is repeatedly accused by the Washington of hacking.
Post-Snowden
Y2013 - China to probe IBM, Oracle, EMC for security concerns. Documents leaked by Snowden revealed that
the NSA has had access to vast amounts of Internet data such as emails, chat rooms and video from large companies, including Facebook and Google, under a government program known as Prism.
Y2014 - Washington indicts 5 PLA members, Beijing’s most recent measured response targets hi-end IBM
Power servers, MS Windows 8 and Iphone to government departments as well a hi-end IBM Power servers to domestic banks.
Beijing is given considerable ammunition by Snowden's allegations, which Beijing has used to point the finger at Washington for hypocrisy.
China remains the world's second-largest IT market. However,
there are significant differences in IT maturity and technology adoptions among different geographies and industries across China.
Online shopping is gaining popularity among Chinese Internet
users, with approximately 50% using the Internet to purchase products or services.
E-commerce transactions continue to explode in China, with
online retail sales exceeding $145 billion in the first half of 2013, which is a 70% increase YoY.
Mobile phones and related telecom services constitute the largest portion of the Chinese IT market, accounting for more than 60% of total IT spending. In 2014, mobile data services present the big opportunity for growth, which will be the fundamental driver of the overall market.
China's leading IT spending growth industries in 2014 are
healthcare, transportation, retail and insurance, all with close to 10% year-over-year growth. IT spending growth is driven by government reforms, infrastructure build-out, rising consumer affluence and a push toward digital businesses.
Cloud, data center infrastructure and mobile has high priority in
large enterprises' IT agendas.
Chinese CIOs rank cloud No. 1 and infrastructure and Data Center as No. 2 Source Gartner
China IT
China IT Spending, 2013-2018 ($B)
China is on the fast track of adopting platform innovation, big data
technologies, mobility and e-commerce.
The SaaS model can help Chinese enterprises focus less on
software maintenance and more on their core business. SaaS also continues to attract nontraditional service players, like ISPs, as they seek to assist buyers in the achievement of desired business outcomes.
The intense pressure for information is driving many enterprises to actively seek new technologies to find useful data to aid in business development endeavors.
The wide usage of mobile Internet and rich social media experiences
will propel Chinese customers, including enterprises, to seek mobile customer service applications.
Small or midsize businesses (SMBs) will become a key growth
engine for China as the economy is transforming to focus on the domestic market and consumption.
Internet giants will expand from their existing SMB SaaS offerings to a broader set of business applications and services. This will position them as strong cloud services providers, along with
telecommunications carriers, IT companies and network equipment providers.
China Cloud Trends
Source: Gartner Research
Smart Cities - Government and Public Service on top of
cloud computing
China Cloud Computing Evolvement
Adoption of cloud computing and evolvement
Public Cloud
Private Cloud
Hybrid Cloud
Survey on 1328 enterprise - CATR
Users’ expectation of Public Cloud service
Storage Service Server Service
Enterprise communication Service
ERP CDN
Search Engine
Cloud Renderer App dev platform
What is Apsara?
In China there are several macro secular trends that drive us
to think about some kind of presence with the End Investor.
• AS OF2012,THE TOTAL MUTUAL FUND ACCOUNTS INCHINA AMOUNTED TO227M,IN WHICH76MARE ACCOUNTS WITH HOLDINGS
• CONSUMER BEHAVIOR AND TECHNOLOGY SUGGESTS A MARKET WHERE END USERS WILL WANT TO MAKE ACTIVE DECISIONS AROUND WHAT PRODUCTS TO BUY (VS. BANKS CHOOSING)
• ONLINE DISTRIBUTION/PAYMENT PLATFORMS ARE AN INCREASINGLY IMPORTANT TOOL FORFMCS AS ALTERNATIVE DISTRIBUTION CHANNELS.
• CSRC HAS AWARDEDALIBABAGROUP ‘STAOBAO A FUND DISTRIBUTION LICENSE, MAKING IT THE FIRST AND ONLY THIRD-PARTY ONLINE PLATFORM TO RECEIVE SUCH A LICENSE.
Apsara is an educational tool for individuals who want to learn
about the China mutual fund industry and mutual fund
investing. Key Features include:
• Provides 3D Macro data visualization to easily understand Fund products and companies in one spot
• Uses Point and Click Smart Search to examine fund type, fund manager, and fund sector data.
• Allows user to visually select and construct virtual portfolios of funds.
• Setup achievement goals and rank performance.
• Setup teams, share investment ideas, comment on fund manager selection.
• Provide feedback on most favored funds and portfolio managers.
Wfbao.com - StateStreetApsara
Visual Analytics Collective Intelligence Universalization of Investment AdviseState Street Apsara Private Cloud
Mac MacBook Laptop PC iPad Android Tablet Windows Tablet
A single data center in general
has over:
–15,000 servers
–20 MW of electricity
–250,000 square feet of
space
–$200 million to build
Source: ‘How the mega center is changing the hardware and data center markets’, a Gigaom Pro cloud report by Martin Piszcalski, 3/18/2013; Sextant Research
Cloud Computing Trends
Cloud computing has proven to be one of the great disruptive technologies of
our time, and the effects of its increasing adoption and maturation will ripple out
through 2014.
• Further segmentation, greater education
• Human resources and marketing take care of Tech Innovation • The CIO becomes a Cloud enabler
• Small companies have access to big software • Shift to application-centric software development • IT increasingly decentralizes
• The Cloud delivers software on tap • Providers add gravity to the Cloud • The Cloud gets intelligent
2x growth in cloud delivery infrastructure in 2 years
Innovation in cloud infrastructure to maximize efficiency and agility
2x growth in IP devices at the edge
10x growth in new cloud applications, impacting every industry
Platforms
• 80% of the new cloud apps will be hosted on the Top 6 PaaS platforms, all data-intensive (e.g.
Hadoop services, IMDB, etc). Data is strategic!
• Enterprises embracing the hyper-scale datacenter ideas for building private or hybrid clouds
(web-scale IT)
• 100+ data-centric industry platforms to be in existence by 2016. Current examples: NASDAQ and
NYSE clouds, TomTom cloud, GM OnStar, Illumina BaseSpace (genetics), John Deere, GE, US DoE, Optum Health, Kaiser.
Web-scale IT
Technology Enablers Going Beyond Traditional OEM Hardware and
Software
• Commodity x86 servers with server-attached flash • Open source software combined with proprietary software
• New infrastructure design & operational practices at the data center, rack and system levels • Collaborative development communities (OCP Scorpio)
• 18 month capacity planning horizon
• Power usage is often the crucial limiting factor • 40% of enterprise flash memory goes to hyper-scale
• Significantly higher ratios of systems or users managed by an employee
Source: ‘In the note, we identify six elements to the web-scale recipe: industrial data centers, web-oriented architectures, programmable management, agile processes, a collaborative organization style and a learning culture. ’, a Gartner blog by Cameron Haight , May 16, 2013 Gartner Research
