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IT majors partner to expand into China

SAP and EMC look to strategic partnerships to gain reach into China

EMC and SAP have both turned to partnerships to expand in China.
EMC and SAP have both turned to partnerships to expand in China.

Technology majors SAP and EMC have both recently announced strategic partnerships with leading China-based tech MNCs to help them tap the booming demand for IT in the country. China's IT market is expected to grow by 16.5% from 2011, to reach $220bn by 2015.

Both of the partnerships announced, SAP with Huawei, and EMC with Lenovo, have a technology development focus, but in both cases the Western partner has stated that the relationship will give reach into China.

Huawei becomes SAP's first Global Technology Partner from China. Under the deal, the two will develop a joint interoperability competency centre, and work on product integration. SAP says that not only will the deal give improved access to the Chinese enterprise market, also to markets in Africa where Huawei has a growing presence.

SAP has already announced a $2bn investment in China, and the company reported 30% growth in software licence revenue in the country in Q2 2012.

"We are pleased to forge a Global Technology Partnership with Huawei, the leading innovative Chinese technology enterprise," said Hera Siu, senior vice president and president of SAP China. "Our partnership highlights SAP's customer-centric ecosystem, which, together with partners, creates and delivers more value and innovations to customers. Through the collaboration between our two world-leading enterprises, we can offer powerfully integrated solutions to help global customers reduce implementation costs, improve profitability and achieve greater success. We also hope our partnership will provide SAP the opportunity to work with more Chinese enterprises and deepen our cooperation with China's entire IT ecosystem; thereby advancing our global technology innovations and business practices."

EMC and Lenovo's strategic partnership will focus on developing Lenovo's x86 server range. The two companies will launch a server technology development program to accelerate and extend Lenovo's capabilities in the x86 server segment, for products that will be brought to market by Lenovo, and embedded into selected EMC storage systems.

The pair will also enter an OEM and reseller relationship, in which Lenovo will provide EMC's industry-leading networked storage solutions to its customers, initially in China and expanding into other global markets. EMC expects to gain significant expansion into China through the deal. EMC will also shift its Iomega detachable NAS business to a joint venture, funded by Lenovo.

Joe Tucci, chairman and CEO of EMC, said: "The relationship with Lenovo represents a powerful opportunity for EMC to significantly expand our presence in China, a vibrant and very important market, and extend it to other parts of the world over time. Lenovo has clearly demonstrated its ability to apply its considerable resources and expertise not only to enter, but to lead major market segments. We're excited to partner with Lenovo as we focus our combined energies serving a broader range of customers with industry-leading storage and server solutions."