ChinaWatch: No Beef With Clouds

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Cloud Computing Boosted

Microsoft Corp. will collaborate with China Mobile Communications Corp., parent of the world’s biggest phone carrier by market value, on developing technologies including cloud computing for Chinese businesses.

Microsoft, the world’s biggest software company, and China Mobile also will partner on information services for businesses, wireless devices, sales and distribution, Bloomberg Businessweek reports.

The companies bet businesses in the world’s fastest-growing major economy will increase spending on computing services and applications accessed through the Internet instead of through individual corporate servers. International Business Machines Corp. and Amazon.com Inc. also are boosting development of cloud services.

A cloud service has three distinct characteristics that differentiate it from traditional hosting over the Internet. It is sold on demand, typically by the minute or the hour; it is elastic, a user can have as much or as little of a service at any given time; and the service is fully managed by the provider (the consumer needs nothing but a computer and Internet access).

By March, 90 percent of Redmond, Wash.-based Microsoft’s engineers will be working on cloud-related products, Chief Executive Officer Steve Ballmer says. State-owned China Mobile Communications owns 74 percent of Hong Kong-listed China Mobile Ltd., which has more than 500 million mobile-phone users.

IBM, based in Armonk, N.Y., plans to spend $20 billion on acquisitions in the next five years as the world’s biggest computing-services company invests in operations that include cloud computing, Chief Executive Officer Sam Palmisano says.

Where’s The Beef?

Talks between U.S. and Chinese officials led to a set of agreements that address some of the core trade grievances raised by U.S. firms which do business – or want to – in the fast-growing Chinese economy, The Washington Post reports.

Although the U.S. side refrains from describing the agreements as a major breakthrough – the list of trade issues between the two countries remains long, and enforcement of prior trade promises has sometimes been lax – officials were buoyed by the result as the Obama administration fights to boost U.S. exports.

The agreements will produce improvements in areas such as China's protection of intellectual property rights, says U.S. trade representative Ron Kirk, who co-chaired meetings with a Chinese delegation led by Wang Qishan, vice premier.

Ranchers, effectively barred from the Chinese market since 2003 after a scare over mad cow disease, will get renewed access to China and potentially billions of dollars in new sales.

Alternative-energy companies will no longer have to build demonstration projects in China before bidding on wind projects there; telecommunications firms will avoid rules that favor locally-developed technology; government industrial catalogs will be rewritten so they are not biased against imported equipment and capital goods; and software companies should benefit as Chinese government agencies are pressed to use only legally-licensed software.

That final commitment, U.S. officials say, will be overseen by Wang – elevating to a high level of government an issue that has been of long-standing concern to U.S. firms which lose revenue to widespread piracy of software and other intellectual property.