Big data storage business to expand exponentially

Financial firms, manufacturers and local govts buy into sector

The turnover of China's data storage and management market has hit $2 billion as more companies embrace the idea of big data, a new way of processing statistics, said Adrian Chan, Greater China president of NetApp Inc, a United States-based data management company.

Smart data management is, undoubtedly, better than traditional data calculation. China is becoming the world's top big data market. The trend is especially clear when the economy is not in the best of shape. [Photo/China Daily]

He added his company is expanding in second- and third-tier cities to enlarge market share in the country.

"As increasing numbers of Chinese companies accumulate large amounts of statistics and want to explore the added-value of these resources, a big data solution will become a natural choice for them," said Chan.

China is expected to become the world's top big data market in the coming years with the turnover of the sector hitting 5 billion yuan ($803 million) by 2016, according to An Hui, director of CCID Group, a think tank under the Ministry of Industry and Information Technology.

Data storage is the foundation of cloud computing and big data technologies. Companies all over the globe have realized they are going to need better data solutions to reduce operating expenses.

The trend is especially clear when the economy is not in the best of shape, said Chan.

NetApp's global net revenue grew from $3.5 billion in 2009 to $6.2 billion in 2012, according to the US financial website CNNMoney.com.

"The economic downturn was an opportunity for us because companies were forced to look for ways to cut their budgets while at the same time their data accumulation was mounting, so our products will provide a timely solution for such companies," according to Chan.

Data storage companies' first customers in China were financial institutions such as banks and insurance companies that have gathered a massive amount of customer information and hope to develop better customer relationships.

Large manufacturers and a number of local governments quickly followed because they, too, have huge amounts of unstructured data to handle on a daily basis.

Currently, most of NetApp's customers are in first- and second-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen. The company said it will increase investment in smaller cities including Xi'an, Shenyang and Jinan in 2013 because of the strong demand.

Chan pledged to add more than 30 percent more investment in the nation's second- and third-tier cities in the next fiscal year, which starts in May 2013.

Chan predicted his major customers will remain in financial, manufacturing and local governments because of the company's limited resources for expansion into other industries.

"The government will encourage the development of industries that can boost domestic demand and improve people's livelihoods. Based on this observation, the industries we currently serve have a lot potential for us to explore," he said.

One of NetApp's biggest jobs is to expand its market share in China. The company only had about a 10 percent share of the nation's data storage market at the end of 2012.

It says it has about 20 percent of the global storage market.

"In China we have to exceed by two to three times the industry's annual growth rate in the coming years in order to catch up with the company's global average market share of about 20 percent," said Chan.

He expects cooperation with other players in sectors such as cloud computing and data analysis will fuel its China business.

"We have teamed up with Microsoft Corp and Cisco Systems Inc so we can provide a fully integrated data storage solution rather than just a metal box for data storage," said Chan, adding that the move will attract more customers who expect to see an overwhelming boom in data in coming years.

gaoyuan@chinadaily.com.cn