EMC Plans $500 Million Investment in China to Boost Local IT Market

Strategic Insights -

US information technology giant EMC Corp aims to expand its presence in China by investing $500 million in the country over the next five years. The move marks a significant increase in EMC's investment in China, where it has established a presence for over a decade. The company plans to set up a research and development (R&D) centre in Shanghai, which will focus on providing software solutions for the global market as well as localization of offerings for the Chinese market.

Key Takeaways:

  • EMC plans to invest $500 million in China over the next five years, a significant increase from its previous investment of $150 million between 2001 and 2005.
  • The company will set up an R&D centre in Shanghai, which will recruit 100 R&D engineers and plans to expand to 500 by 2008.
  • The Shanghai R&D centre will focus on providing software solutions for the global market as well as localization of offerings for the Chinese market.
  • EMC has over 20 R&D facilities globally, with four in India, and the Shanghai centre will be one of the largest.
  • China's IT market is growing substantially faster than other parts of the world, generating increasing demands for information storage and management.
  • The storage equipment market in China was worth 1.99 billion yuan (US$249 million) in the fourth quarter of last year, increasing 16.4% year-on-year.
  • China accounted for 39% of the storage software market in terms of revenue, with EMC's annual sales in China growing by 45 times over the past 10 years.

Statistics:

  • $500 million: EMC's planned investment in China over the next five years.
  • 100: Number of R&D engineers to be recruited at the Shanghai R&D centre initially.
  • 500: Target workforce at the Shanghai R&D centre by 2008.
  • 39%: Share of EMC's annual sales revenue in China's storage software market.
  • 45: Times increase in EMC's annual sales in China over the past 10 years.
  • $9.7 billion: EMC's global revenue last year.
  • 11%: Contribution of the Asia-Pacific region to EMC's global revenue.
  • 1.99 billion yuan (US$249 million): Value of China's storage equipment market in the fourth quarter of last year.
  • 16.4%: Year-on-year increase in China's storage equipment market.

Sources:

  • Asia Pulse, "EMC plans $500 million investment in China", June 26
  • IDC, China's Storage Software Market Report
  • Analysys International, China's Storage Equipment Market Report
  • EMC Corp, Company Website