INSPUR GROUP EYEING CLOUD COMPUTING MARKET

AsiaInfo Services
03-28-2011
Inspur Group Eyeing Cloud Computing Market

BEIJING, Mar 28, 2011 (SinoCast Daily Business Beat via COMTEX) -- Although its satisfying performance of last year did not result from pillar business, the concept of cloud computing proposed by Langchao Electronic Information Industry Co., Ltd. (SZSE: 000977) arouses the imagination of insiders.

Last August, Inspur Group announced its cloud computing strategy In-Cloud ahead of other peers, consolidating its leading status in the Chinese cloud computing market.

Langchao Electronic Information has revealed its financial report for 2010, showing that its net profits recorded CNY 34.3049 million or CNY 0.16 per share in the period. A year ago, the company incurred a loss of about CNY 3.42 million.

The satisfying performance was based on rising gross margin of its pillar business and increasing investment returns from companies it takes stakes. As a leading server supplier, Langchao Electronic Information gained a gross margin of 21.13% for its pillar business, climbing 1.04 percentage points from a year earlier.

An unnamed analyst tells reporters that most of the profits of Langchao Electronic Information came from selling properties and investment in companies it takes stakes last year.

Hence, the company's future growth depends on its cloud computing strategy, which will lower the admittance threshold of servers and boost their sales volume. Meanwhile, Langchao Electronic Information will propose systemized cloud computing solutions, which will lift up its gross margin.

A top executive of Langchao Electronic Information predicts that China's server market will keep a stable growth of 13% to 14% in 2011 and competition among server suppliers will focus on innovation and diversified product ranges.

Cloud computing is considered as another round of IT revolution around the world during the future three to five years following personal computers and the Internet.

Data from CCID Consulting (SEHK: 8235) show that China's cloud computing market reached CNY 16.731 billion in 2010 and is expected to swell to CNY 60.678 billion by 2012, with a compound annual growth rate of 87.4%.

In the coming two years, the technology will be widely applied in industries such as government, telecommunications, education, medical treatment, finance, petroleum and petrochemical and electricity.

Sinolink Securities Co., Ltd. (SHSE: 600109) believes that Langchao Electronic Information will benefit from private cloud applications in the governmental and military fields.

On February 11, 2011, Langchao Electronic Information announced a private placement of not more than 57 million shares at not less than CNY 17.81 per share to finance at most CNY 1.004 billion. Most of the financed capitals will be put into upgrade and industrialization of cloud computing operating systems.

(USD 1 = CNY 6.56)

Source: www.sohu.com (March 28, 2011)

KEYWORD: BEIJING INDUSTRY KEYWORD: Computers & Electronics SUBJECT CODE: Computer
Software
SinoCast China Business Daily news
SinoCast China IT Watch
cloud computing
In-Cloud
gross margin
server
private cloud
private placement

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