Cloud Computing Industry
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1 Recommended Industries for Foreign Investment in Taiwan Cloud Computing Industry ITRI IEK WEI, Yi-ling Tel: / 1 / 1 Client: Contractor:
2 Industry Definition and Scope Vendor/Research Institute Gartner IDC Forrester Definition A style of computing where scalable and elastic IT-enabled capabilities are provided as a service to external customers using Internet technologies Cloud computing can be considered a highly elastic and extensible computing center that provides users with applications they require and billed according to the amount of resources used. Cloud computing is a computing network platform with on-demand IT capabilities that can be requested, supplied, delivered and consumed over the Internet. Cloud computing = All the required application software and resources are stored on the Internet and can be accessed through the browser on any device. Cloud computing can be considered a style of computing. The computing resources are dynamic, easily scalable, virtualized and are often provided over the Internet. The user does not need to understand the details of the "Cloud" infrastructure, does not need to be equipped with the relevant professional knowledge and does not need to have direct control either. Source: ; IDC; Forrester; ; Gartner; IEK (010/01) Provided as a service: All the IT resources required by the user (applications, development tools and computing resources i.e SaaS, PaaS, IaaS) are provided to the user over the Internet. The user does not need to purchase or maintain the hardware and is only billed on the resources used. Improve the effectiveness of existing IT architecture: Use the introduction of virtualization technology to allow dynamic allocation of IT resources so the user can realize centralized administration, improve system utilization, reduce energy consumption and ultimately reduce costs. Source: ITRI IEK (010/06) Copyright 010 ITRI 1
3 Current state and trends in the global and Taiwanese market Projected output of the global cloud services industry, Projected output of the Taiwanese cloud services industry, NTD:MILLION SaaS PaaS IaaS (e) 011(f) 01(f) 01(f) Source: ITRI IEK (010/06) Note: IaaS includes server hosting, remote backup and SOC service; SaaS covers any software leasing services that are provided on-demand over the network Source: MIC. 009/05 The above projections only cover the Public Cloud Service (IaaS, PaaS, SaaS) and do not cover the conversion of internal IT architecture by businesses. The majority of growth in the IaaS and PaaS market between 008 and 010 came from the adoption of cloud services by new startups and small users. More concerns over cloud introduction among medium and large enterprises means growth will begin to slow in 010. SaaS service is the main source of growth in cloud services. Between 009 and 011 the main market was in non-core operations. Improvements in virtualization and IT security technologies in the second half of 011 are expected to drive new growth in the overall services market. The industry output from architecture conversion is still counted as part of On-premise IT spending. Initially, the main hardware demand will come from cloud service providers' data centers with demand from SaaS service providers growing at the fastest rate. Next is the demand from conversion of IT architecture by SMEs. IaaS is the main source of revenue in the Taiwanese cloud services market, accounting for 91.% of the overall Taiwanese service market in 009. SaaS has market growth potential but was worth only NT$90 billion in 009, or just 8.8%. Copyright 010 ITRI Source: ITRI IEK (010/06)
4 Division of labor in the Taiwanese and global industry chain Datacenter Platform Application Hardware Virtualization System Integration Management Tool / OS Operations IT Outsourcing OS/Software Platform Terminal Equipment Application Providers Server Dell Networking Cisco Juniper Brocade NEC Data Virtualization SI Center Planning VMware Citrix Xen Rackable Liebert ( 力 博 特 ) Adaptivity VMware Cordys System Management VMware Novell VMops Abiquo Gap in domestic industry chain Hosting Amazon Navisite Rackspace GoGrid OS/Software Platform Oracle Gap in domestic industry chain NB Dell Sony Lenovo Toshiba Fujitsu Mobile Phone Nokia Apple Samsung LG Blackberry Commercial Software Oracle Salesforce Symantec General Software Server 英 業 達 緯 創 華 碩 神 達 技 嘉 凌 華 Disk Array 喬 鼎 世 仰 廣 盛 普 安 Networking 智 邦 達 創 建 漢 廣 達 Other (Non-ICT) 新 光 保 全 Power supply 台 達 電 康 舒 全 漢 SI System Management 敦 陽 ITRI 關 貿 (End of 010) 聚 碩 中 華 系 統 整 合 華 電 聯 網 晉 泰 統 一 資 訊 (Retail) 騰 雲 財 金 (Financial) 精 誠 (Financial) 凌 群 Hosting 中 華 電 信 ( 是 方 電 訊 ) 遠 傳 精 誠 ( 金 融 ) 凌 群 安 碁 英 業 達 SeedNet NB Acer ASUS MSI Mobile Phone Acer ASUS HTC Commercial Software 趨 勢 科 技 General Software 訊 連 科 技 Hardware consists mainly of ODM and OEM. Lacking in hardware system integration capability. Copyright 010 ITRI Lacking in crossindustry IT consulting capability. Tend to be small companies specializing in specific industries. Has advantage in cost (hardware, networking) but is lacking in system management capability. Too far behind large vendors in business software market share and R&D capability.
5 International Comparison of Foreign/Overseas Chinese Investment Advantages in Taiwan - Cloud Computing Aspect Sub-indicators (scoring guide) Taiwan Korea Singapore Hong Kong China Total exports (incl. China) Domestic market size Market Domestic market growth rate National product quality image Control of international channels Domestic market threshold R&D capability Control of key technologies Technology Technical innovation Specification definition 1 New product development rate Product yield rate Accessibility to water/electricity Production factors Accessibility for transportation and logistics Availability of professional expertise (incl. international expertise).5 Cost of capital Support system Completeness of upstream/downstream industry chain 1 Government incentives and support Policy Tax incentives Encourage overseas investment Encourage foreign investment PS: 5-point scale: If competitiveness is equal to Taiwan, the score is. The best score is 5 and the worst score is 1. Copyright 010 ITRI
6 Advantages of the Taiwanese cloud industry and attractions for overseas/compatriot investors Industry advantage Complete ICT hardware industry cluster Leading global OEM and ODM vendors for server and networking hardware Local hardware vendors have a long relationship with top international cloud vendors Shares a common cultural background with the world's largest domestic market - China Stable political-economic environment Attractions for overseas/compatriot investors Joint R&D in cloud hardware is fundamental to cloud development Cloud data center construction is fundamental to providing cloud services Data center hardware must be adjusted according to software or business needs Hardware vendors are an important channel for cloud service/product sales. VMware and, for example, sell virtualization software through server vendors. Stability of the political environment affects vendor control over data IT security regulations and protections vary greatly between countries and this affects the vendor's business model 's threat to withdraw from China showed how national policy has a major impact on vendor control over data Copyright 010 ITRI 5
7 Industry opportunities: Rapid expansion of data centers and burgeoning demand from the Asian market means Asia is a key future market for cloud Amazon/ Oracle services target North America and Europe Cloud data center R&D/Design center Operations center owns or supports 50 data centers worldwide; has research labs in Europe, the US and China. Will continue to help vendors build data centers in the future 's main cloud services market is currently North America. Future expansion in Europe and Asia planned. The cloud data centers of international vendors are generally located in North America, continental Europe and Asia. Based on the growth in demand from Asia and 's roll-out strategy, the next key market for, Amazon and Oracle's cloud services will be Asia as well. As the main ICT hardware supplier, Taiwan will become an important partner in future data center construction. The establishment of R&D centers by foreign companies is therefore very important in the short-term. Copyright 010 ITRI 6
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