Technology Integration Group Aims To Whet China's Cloud Appetite

For centuries, China has excelled at designing and building large-scale infrastructure. Now, in its eagerness to become a cloud-computing powerhouse, the country is building data centers with an eye on the future.

Yet, much of China's data center infrastructure is underutilized due to a lack of killer cloud applications, and local software development expertise is not easy to find. And this classic technology chicken-and-egg scenario is preventing the Chinese cloud-computing market from taking off.

Technology Integration Group, San Diego, Calif., has a plan for stimulating cloud application development. If it works, it just might jump-start China's long awaited cloud revolution.

[Related: 8 Snapshots From Technology Integration Group's China Cloud Launch ]

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Last month, TIG launched a cloud joint venture with local partner Longsky Software, an application development firm based in Jiangyin, a city in the Chinese province of Jiangsu located about an hour's drive from Shanghai.

Called TIG Cloud, the joint venture is Jiangyin's first citywide cloud-computing initiative. By combining TIG's private cloud hardware expertise with Longsky Software's development skills, TIG Cloud intends to develop and market a range of industry-specific cloud applications, according to Jack Xu, general manager of TIG China and CEO of the TIG Cloud joint venture.

"The Chinese market is flooded with cloud marketing messages, but there is no firm content for people to really grasp," Xu told CRN in a recent interview. "We have to use our industry expertise and turn that into meaningful, valuable cloud applications, so that customers can get a feel for it."

The TIG Cloud opening ceremony, held in Jiangyin in late April, was a diverse gathering of around 170 government officials, local business and education leaders, and enterprise software and hardware vendor representatives. After the obligatory official speeches, TIG Cloud executives surprised the audience by launching the joint venture using a cloud application running on an iPad.

"When you talk about cloud, you are talking about being able to access applications anywhere, on any device. That is the message we wanted to deliver to the officials and to the public," Xu said.

For TIG, the launch was the culmination of an effort that began three years ago when the San Diego-based integrator began doing business in China.

Building cloud infrastructure requires local partners, access to the local market and, most important, a deep and wide relationship with the government, Ying McGuire, TIG's San Diego-based vice president of international business, told CRN.

NEXT: TIG Cloud's First Target Customer

"Cloud is becoming a really hot topic in China," said McGuire, who joined TIG last year after spending the previous 12 years at Dell. "Most companies don’t have their own IT infrastructure, so to build their own private cloud is costly. Public cloud is attracting more interest, because few companies have the hardware and infrastructure expertise."

TIG Cloud will start by launching vertically focused cloud solutions for the education, port authority, and manufacturing and tourism markets. For the initial phase of each project, TIG Cloud will seek funding from the local government. Ultimately, however, the joint venture will generate revenue through a usage-based model that depends on the traffic its apps attract, McGuire said.

"The challenge with cloud computing is coming up with solutions that people can actually use," she said. "In verticals like education, there is a need for teachers, students and parents to collaborate online and become more efficient by sharing knowledge."

TIG Cloud has already identified potential customers who could benefit from its cloud solutions expertise. Jiangyin is a large-scale producer of textiles, chemicals and metals, and TIG plans to target these industries in the next phase of its expansion, said McGuire.

"We will work with the government to offer services to these manufacturers -- if they want to have office automation tools, for example, they can use our cloud," McGuire said.

TIG Cloud is also working on tourism-related cloud apps for the city of Jiangyin. If successful, this model could be applied to other Chinese cities and may represent another future revenue stream, McGuire said.

Cloud computing is not a new concept in China, but the promise of cloud apps is largely unproven. TIG Cloud, as an early mover in cloud development, believes it can be the first to demonstrate that the cloud is about more than just hype -- and can actually be used to transform a business.

"There will always be a need for someone at the solutions level and application level to design something meaningful to customers," TIG's Xu told CRN. "The intellectual piece is what China is trying to catch up on, and that is what we do."