EMC to Ramp up Presence

US technology giant EMC Corp plans to open 20 offices in China within five years and expects its software sales in the country to double each year during the five-year period, its president said.

That will be part of EMC's accelerated expansion drive in China after it announced in June 2006 it would invest US$500 million in the country by 2010.

Denis Yip, president of EMC Greater China, said the firm would open four offices in Shenyang, Xi'an, Nanjing and Wuhan this year and planned to increase the number to 20 within five years.

EMC is the world's largest data storage company, competing with IBM and Hewlett-Packard. The firm, which previously focused on storage gear sales, has transformed itself into an information management company by shifting to software sales in recent years.

In 2006 it generated worldwide revenue of US$11.2 billion, with software and service revenue accounting for 54 percent.

But, "the proportion in China is much smaller", said Yip, adding that Chinese firms' IT spending has mainly gone toward hardware rather than software.

"Previously they shied away from buying software products and services. But now they are starting to put a premium (on such products and services)," said Yip.

The president said he hoped software sales would account for one-third of EMC's total revenue in China by 2011.

Surging demand for software products and services in China, especially from banks, could boost EMC's licensing sales.

EMC has beefed up its localization of both manufacturing and research and development (R&D) activities in China to cash in on a boom for storage software, hardware and services.

Last year the firm launched an R&D center in Shanghai as part of its $500 million investment.

The center now employs 135 people and Yip expects the headcount to reach 500 by the end of next year.

(China Daily March 16, 2007)