China as tech companies continue to ramp up presence with expansion
plans and new support operations.
US storage provider EMC has just announced in July it will invest US$500
million in China over the next five years. Meanwhile US-based provider
of outsourcing services from China, Freeborders, has also dramatically
increased the size of its Shenzhen facility to four times its original size.
This investment from EMC will initially create the company's first
China-based research and development facility located in Shanghai and is
expected to open in August.
The new center is part of EMC's global research and development
investment, which is expected to be more than US$1.2 billion in 2006. In
China, EMC has established a comprehensive China Solutions Center
network, deepened its relationships with key Chinese customers, created
partnerships with software and systems integrators, opened training
centers to certify networked storage specialists, and made significant
contributions to the academic community in China.
"We at EMC are deeply committed to China for the long term. We plan to
more than double our current investment in China so that we can more
fully tap into the country's tremendous pool of talented engineers,"
said Joe Tucci, EMC's chairman, president and CEO.
Insatiable development hunger
EMC's Shanghai-based development center will provide support and
ongoing development across the company's broad portfolio of
market-leading software solutions, and will play a role in accelerating
the localization of EMC products for China and other Asian markets. The
center is expected to employ approximately 100 developers by year-end
and grow to 500 by the end of 2008. It is part of EMC's network of
state-of-the-art development facilities in the US, Belgium, France,
India, and Israel.
Last year, EMC's overall software revenues ranked the company seventh
among the world's largest enterprise software providers. EMC is the
world's top provider of storage and content management software,
according to IDC.
The research firm also ranks EMC as the top storage software vendor in
China, capturing 39 percent of the country's storage software revenue in
2005. EMC entered the Chinese market in 1996 and today operates offices
in Beijing, Shanghai, Guangzhou and Chengdu.
Outsourcing storms onwards
Freeborders will quadruple the size of its Shenzhen facility to
accommodate 2,000 workers in response to increased demand for outsourced
software projects from retail, manufacturing and financial services
institutions.
This follows the completed expansion of the company's Shenzhen facility
in January 2006, which grew the office site to 52,000 square feet. The
move underscores Freeborders' commitment to the burgeoning Chinese IT
outsourcing industry.
The new, world-class development facility will continue to provide
global organizations with a full range of application outsourcing,
business process, consulting and systems integration services. It will
include the latest communications infrastructure to ensure tight
collaboration with onshore project managers in both Europe and the US.
The facility will maintain the rigorous data security protocols set by
Freeborders, while enhancing the capabilities of its staff. Physical
safeguards, such as enclosed programming areas are integrated into the
new site. In addition, confidential data and projects are secured
through isolated networks, unauthorized file access audit trails and a
clear set of internal policies and procedures.
Growth quickens further
According to recent research by Analysys International, China's
software outsourcing services market reached $323 million in the first
quarter of 2006, up almost 44 percent compared with the first quarter of
2005. IDC has forecast that China is expected to account for 24 percent
of IT spending in Asia-Pacific by 2010, making it the largest IT
services market in the region.
"Freeborders is dedicated to expanding its resources in China as the
region's IT outsourcing market continues to gain traction," said John
Cestar, CEO of Freeborders. "Changes to the skills market and
infrastructure in China are helping its outsourcing industry grow
quickly and emerge as a major competitor to India. With the roll-out of
our new 200,000 square foot facility and the fact we're already advanced
in our further expansion plans, Freeborders is well positioned to
harness China's IT expertise."
In 2005, Freeborders experienced significant growth which fueled an
increase in capacity of its Shenzhen technology center by 100 percent to
over 700 engineers. Freeborders also became one of the first firms in
China to be certified at CMMI Level 5, the highest quality rating
offered by the Software Engineering Institute at Carnegie Mellon
University. Freeborders is one of 70 CMMI Level 5-certified companies in
the world.