Helping the country grow jobs
EMC's locally focused approach in China makes it a natural candidate to support that government's more-than $586 billion fiscal stimulus program.
EMC has always strived to be a local company committed to China for the long term, says Steve Leonard, SVP and president of EMC APJ. Almost all of EMC China's 1,000-plus employees are Chinese, and they work with more than 1,000 Chinese partner entities. EMC, intensely interested in helping China grow jobs, has invested more than $1 billion there so far.
With upgrades underway for China's transportation, hospital, and school infrastructures, EMC will do more of what it is already doing-although, perhaps, faster and with more resources, Leonard says.
EMC China's local workforce has advantages in interacting with the Chinese government and a personal interest in helping to stimulate the economy. "But it's not because a stimulus package is now in place," Leonard says. "That package is putting money into important projects that we would be, and should be, supporting in any case."
EMC recently signed a memorandum of understanding with SinoRail Information Engineering Group, the IT solutions provider owned by the Ministry of Railways of the People's Republic of China. EMC has created a railway-dedicated consulting team, and "we absolutely want to be a bigger player in supporting this agency," says Leonard. "Again, we are a local company. When this government is putting money into something that will enhance infrastructure and generate jobs for people, then, of course, we feel privileged to play a part."
Denis Yip, president of EMC Greater China, says that rather than using playbooks in China, the company is pursuing stimulus business one opportunity at a time.
For the most part, opportunities appear to be within EMC's core storage, backup, and recovery businesses. In some cases, stimulus funds are augmenting projects that EMC already was actively supporting.
Of the $586 billion the government is investing between 2009 and 2011, roughly 45 percent is for new-infrastructure building, 25 percent is for infrastructure reconstruction, and 30 percent is for various other environmental or civil improvements. Probably 4 percent of the money, overall, will be spent on information technology.
China tends to take a long-horizon view; opportunities being explored now may take years to complete. For now, EMC is targeting IT opportunities in several areas.
The first is telecommunications, an industry receiving hundreds of millions of dollars in stimulus funds to expand and upgrade infrastructure and data centers. EMC is hoping to help by providing storage, backup and recovery, archiving, and Ionix-based network and systems management.
In healthcare, EMC is partnering with General Electric and Chinese software maker NewSoft to provide IT infrastructure to 500 of China's most advanced hospitals. Prior to the stimulus, EMC had only about 80 installations in Chinese hospitals.
Third, EMC is supporting stimulus projects related to the railway, state electric grid, and law enforcement.
"It's not that a stimulus package creates a whole new engine," Leonard says. "Rather, China's stimulus funding is like oil flowing in an engine's parts to reduce wear. It smoothes things that otherwise would be a little bit clunky."