Lo­cal server stocks rise on ru­mors of IBM bank ban

Do­mes­tic IT providers likely to see their adop­tion rate rise, an­a­lyst says

China Daily (Canada) - - BUSINESS - By GAO YUAN gaoyuan@chi­nadaily.com.cn

Stocks ofChi­ne­se­in­for­ma­tion­tech­nol­ogy com­pa­nies jumped Wed­nes­day on spec­u­la­tion that China may re­move IBM Corp’s servers from its bank­ing sec­tor. In­dus­try in­sid­ers be­lieve lo­cal IT providers are set to be the big­gest ben­e­fi­cia­ries as the na­tion’s cy­ber­se­cu­rity con­cerns in­crease.

Yonyou Soft­ware Co Ltd, the largest lo­cal en­ter­prise soft­ware maker by mar­ket share, surged by 7.82 per­cent on the Shang­hai Stock Ex­change on Wed­nes­day. The CSI 300 In­for­ma­tion Tech­nol­ogy In­dex also rose by 2.85 per­cent, hit­ting its high­est close sinceMay 6. The in­dex mon­i­tors top tech com­pa­nies trad­ing on the Shang­hai and Shen­zhen stock ex­changes.

Also jump­ing was Len­ovo Group Ltd, the world’s No 1 per­sonal com­puter maker and a ma­jor server provider in­China. TheHongKong-listed com­pany was up by 1.03 per­cent.

Lo­cal IT providers are most likely to see their adop­tion rate rise as the Chi­nese govern­ment tight­ens re­stric­tions on prod­ucts pro­vided by over­seas com­pa­nies, said Gene Cao, se­nior an­a­lyst at For­rester Re­search Inc.

In­dus­try reg­u­la­tors, in­clud­ing the People’s Bank of China, the cen­tral bank, and the Min­istry of Fi­nance, are re­view­ing a new rule to have the na­tion’s commercial banks stop us­ing IBM servers be­cause of po­ten­tial se­cu­rity risks, Bloomberg re­ported, cit­ing anony­mous sources.

IBM Corp is “not aware of” any Chi­nese govern­ment pol­icy to re­move its servers from the bank­ing in­dus­try, the United States com­pany said in a state­ment.

China Daily con­tact­edChenWenx­iong, di­rec­tor of the tech­nol­ogy risk man­age­ment of­fice at the China Bank­ing Reg­u­la­tory Com­mis­sion to cor­rob­o­rate the story, buthe­said that he had ”no idea” about any new­pol­icy and re­fused to com­ment.

“In fact, news re­ports now state that China’s Na­tional De­vel­op­ment and Re­form Com­mis­sion has not heard of any al­leged di­rec­tive to that ef­fect,” said IBM, adding that it has been a “trusted part­ner” in China for more than 30 years. IBM’s high-end servers are widely used in Chi­nese banks. Big Blue re­fused to pro­vide its ex­act mar­ket share.

Al­though there are no sign of lo­cal banks drop­ping servers pro­vided by IBM, lo­cal man­u­fac­tur­ers are al­ready tak­ing the ini­tia­tive to try to lure cus­tomers away from IBM.

In­spur Group Ltd, a Ji­nan-based server provider, has started an “IBM to In­spur” cam­paign to weaken Big Blue’s mar­ket share, ac­cord­ing to Bloomberg.

“It is com­mon for ev­ery coun­try to choose home­grown tech­nol­ogy sup­pli­ers over for­eign com­pa­nies if their tech­nol­ogy level is even,” said Kitty Fok, China man­ag­ing di­rec­tor for global re­search firm IDC.

In Jan­uary, IBM sold its lower-end server unit to Len­ovo Group Ltd for $2.3 bil­lion. The deal is cur­rently un­der re­view in many coun­tries, in­clud­ing the United States and Canada. The ac­qui­si­tion will be com­pleted later this year, Len­ovo said.

In March, a mas­sive strike hit IBM’s x86 server fac­tory in south­ern Guang­dong prov­ince due to la­bor dis­putes.

IBM pro­vides high-end servers such as the Sys­tem z and Power Ar­chi­tec­ture-based prod­uct lines.

The com­pany’s other China busi­ness, in­clud­ing some with heavy govern­ment in­volve­ment, seem to be op­er­at­ing as usual de­spite un­cer­tain­ties in the server unit.

IBMis sched­uled to ink a deal with lo­cal gov­ern­ments on pro­vid­ing air pol­lu­tion mon­i­tor­ing so­lu­tions in sev­eral cities, in­clud­ing Bei­jing, the seat for all­ma­jor­gov­ern­men­tor­ga­ni­za­tions.

Other US tech­nol­ogy com­pa­nies are also feel­ing pres­sure in China as ten­sions over Sino-US cy­ber­se­cu­rity is­sues es­ca­late.

Mi­crosoft Corp and Cisco Sys­tems Inc ex­pressed con­cern toChina Daily about sep­a­rate de­ci­sions made by the Chi­nese govern­ment over the past week to tighten re­stric­tions.

Most of the­se­movescameafter the US ac­cused fiveChi­nese mil­i­tary of­fi­cials of steal­ing busi­ness in­for­ma­tion from US com­pa­nies. China de­nied the ac­cu­sa­tions, say­ing they were “made up”.

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.