Taiwan Firms Best Poised to Benefit from Cloud Computing Boom

TAIPEI, Taiwan, Oct. 21, 2011 /PRNewswire-Asia/ -- Taiwanese ICT firms Quanta Computer Inc. and Wistron Corp. are the two industry players best poised to benefit from the cloud computing server market that is expected to boom in the next three years. That's according to a recent report issued by Morgan Stanley. Experts predict the worldwide cloud-computing market will be worth more than US$400 billion by 2012, and Brazil is expected to be among the first Latin American nation to develop its cloud market.

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, 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 Hewlett-Packard 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.

Amid its fast economic growth, Brazil is the most developed IT market in Latin America. Consequently, the country is expected to be an early adopter of cloud computing solutions in the region. Brazil was also among the economies that were not too affected by the global economic crisis, prompting initial cloud computing investments in 2009. A majority of the nation's software vendors and IT service providers have been investing in cloud architecture in order to market their capabilities and experiences with clients from different business verticals.

With a population of over 200 million, Brazil has huge potential for developing its cloud market. The Global Technology Forum recently said that Brazil is by far the largest IT market in Latin America, with an industry producing computer and telecoms equipment worth over US$30 billion. What's more, the security issues affecting the adoption of cloud in other developed countries are not as big an issue in Brazil.

The most common cloud computing solution currently in place in Brazil relates to applications, particularly e-mails and customer relations management solutions.

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: [email protected]

TAITRA
Michelle Wu
Tel: +886.2.2725.5200 ext. 1319
Email: [email protected]

SOURCE Taiwan External Trade Development Council (TAITRA)

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