Taiwan Takes Aim at Cloud-Computing Market

With its solid ICT (information and communications technology) industry as a springboard, Taiwan is planning to jump onto the cloud-computing bandwagon and cash in on the huge potential of emerging markets.

During the 2010 Taiwan Business Alliance Conference, Economics Minister Shih Yen-shiang pointed out that the government has listed cloud computing as one of the four major emerging "smart industries" targeted for priority development. The government intends to sink NT$24 billion (US$750 million at NT$32:US$1) to support the development of the industry over the next five years, hoping to induce NT$12.7 billion (US$367 million) in R&D spending and NT$100 billion (US$3.1 billion) worth of investment by domestic enterprises, and to create 50,000 jobs. Shih predicted that cloud computing will become another of Taiwan's trillion NT dollar (US$31 billion) industries.

The government's investment plan is part of the "program for the development of cloud computing industry," approved by the Executive Yuan (the Cabinet) in late April, which calls for forging a cloud-computing-based e-government and establishing cloud-computing databases with convenient access for the local people.

To provide technological support to the private sector for development of the cloud computing industry, the government-backed Industrial Technology Research Institute (ITRI) has set up a "Cloud Computing Center" and tasked it with integrating the nation's cloud-computing hardware, developing high-performance cloud-computing software, and promoting cloud-computing applications. In addition, ITRI coordinated the formation of the "Taiwan Cloud Computing Industry Alliance" on April 7; the alliance has 50 members, including ITRI, the Institute for Information Industry, Taiwan Electrical and Electronic Manufacturers' Association, the Information Service Industry Association, and the state-run Chunghwa Telecom.

The aggressiveness of the government in pushing the development of cloud computing is prompted by the huge potential of the industry's global market, which is expected to be worth more than US$150 billion by 2013, according to Gartner, an industry research body. The market will expand vigorously as growing numbers of individuals and enterprises tap major service providers for various services and software applications for the sake of convenience, efficiency, and economy.

Taiwan is in an advantageous position for the development of cloud-computing hardware, such as high-performance servers, thanks to its strength in ICT technology. Chen Yen-chuan, software supervisor of the Wistron Corp., estimates that Taiwanese firms enjoy a 30% cost advantage over their foreign rivals in developing cloud-computing operating systems.

Attracted by this competitive edge, Microsoft established a "Microsoft Software and Services Excellence Center" in Taiwan on June 3 this year. This new facility will join hands with Quanta Computer and Delta Electronics in developing energy-saving, module-based cloud-computing servers.

Growing numbers of local ICT firms are jumping onto the cloud-computing bandwagon. Quanta Computer, a local pioneer in the field, will start turning out cloud-computing products encompassing hardware, services, and solutions in the second half of this year. Its output will include cloud-computing cameras, according to Quanta chairman Barry Lam.

Inventec is scheduled to launch an NT$100 million (US$3.1 million) cloud-computing testing center by the end of the year, enabling the company to provide cloud-computing solutions to overseas markets. In cooperation with ITRI, Wistron is slated to roll out cloud-computing operating systems in August and start exporting them next year.

Some local ICT firms have rolled out high-performance servers that meet the requirements of cloud computing for energy conservation and efficient heat dissipation. Mitac and Gigabyte, to cite just two of them, exhibited such products on June 1-5 during COMPUTEX Taipei 2010.

Industry players note that in addition to hardware, Taiwanese firms, with their advantage of language and cultural affinity, are well-positioned to develop cloud-computing services for the huge Chinese market.