In­spur’s over­seas push based on do­mes­tic R&D

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

In­spur Tech­nolo­gies Co Ltd, the lead­ing Chi­nese server and data ser­vices provider, is now fo­cused squarely on ex­pand­ing its busi­ness out­side of the coun­try, par­tic­u­larly in Europe and Africa, ac­cord­ing to Chair­man and CEO Sun Pishu.

He said ma­jor Chi­nese telecom­mu­ni­ca­tions equip­ment ven­dors such as Huawei Tech­nolo­gies Co Ltd and ZTE Cor­po­ra­tion had al­ready cre­ated wide­spread net­works in the re­gions.

”Now it is our turn to add data cen­ters and ser­vices on top of that in­fra­struc­ture,” Sun said.

The coun­try’s Belt and Road Ini­tia­tive and the cre­ation of the Asian In­fra­struc­ture In­vest­ment Bank — flag­ship eco­nomic pro­grams which will help strengthen re­la­tion­ship with neigh­bor­ing economies — also of­fer In­spur what Sun called a “golden op­por­tu­nity” to sell its prod­ucts to the gov­ern­ment agen­cies and large en­ter­prises in­volved in both.

“Tech­ni­cally, many of our over­seas cus­tomers now face sim­i­lar chal­lenges when it comes to ed­u­ca­tion, health­care and en­ergy that China had to tackle in the past,” said Sun.

Gene Cao, a Beijing-based an­a­lyst with For­rester Re­search Inc, said some Chi­nese IT com­pa­nies still face fierce com­pe­ti­tion when it comes to win­ning over­seas cus­tomers, be­cause do­mes­tic ven­dors are still rel­a­tive new­com­ers on the world stage.

“It is eas­ier to gain mar­ket share in lower-end mar­kets where they can com­pete well on price. But of­ten the tech­nol­ogy gap makes it dif­fi­cult to en­ter higher-end mar­kets,” said Cao.

Sun said, how­ever, he is con­fi­dent that with sus­tained in­vest­ment in re­search and de­vel­op­ment, In­spur is ca­pa­ble of tak­ing on high-end mar­kets, and so has pledged to in­crease its R&D spend­ing to 12 per­cent of an­nual rev­enue over the next five years from the cur­rent 7 per­cent.

In re­cent months, there have been var­i­ous head­line ac­qui­si­tions by cash-rich Chi­nese tech gi­ants, in an ef­fort to ad­dress their tech­nol­ogy short­com­ings.

Ts­inghua Un­i­group Ltd, for in­stance, is buy­ing stakes in two Tai­wan-based chip­mak­ers for 13.5 bil­lion yuan ($2.1 bil­lion), while Len­ovo Group Ltd ear­lier bought IBM’s x86 server unit.

“In­spur has no in­ten­tion of fu­el­ing its ex­pan­sion by ac­qui­si­tion, and will in­stead be re­ly­ing in­stead on de­vel­op­ment its own cut­ting-edge tech­nol­ogy.

“We have a very dif­fer­ent ap­proach when it comes to ex­pan­sion. We also pre­fer to sign part­ner­ships to beef up the busi­ness,” Sun said .

In­spur has main­tained steady growth over the past five years, fu­eled by on­go­ing do­mes­tic de­mand for in­for­ma­tion tech­nol­ogy prod­ucts and data an­a­lyt­i­cal ser­vices.

Ris­ing con­cern over data se­cu­rity has also helped the Ji­nan-based firm gain mar­ket share of the gov­ern­ment­pro­cure­ment sec­tor, pre­vi­ously dom­i­nated by United States ven­dors in­clud­ing IBM Corp and Hewlett Packard En­ter­prise.

Ac­cord­ing to re­cent fig­ures from in­dus­try con­sul­tancy In­ter­na­tional Data Cor­po­ra­tion, Chi­nese server ven­dors— led by In­spur and Len­ovo — took more than half of that pro­cure­ment mar­ket this year, up from less than a fifth in 2011.

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