Intel Capital Invests in Chinese Cloud Providers

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Seeking a larger share of a booming market, Intel Capital announced this week that it is investing in three Chinese cloud providers. An undisclosed amount of venture capital will be invested in Shanghai Yeapoo Information Technology, Tianjin Zhongke BlueWhale Information Technology and Wuxi China Cloud Technology Service.

Wuxi China Cloud provides cloud infrastructure from its mainland data centers. Tianjin Zhongke BlueWhale makes network storage products, such as a clustered file system. Shanghai Yeapoo builds websites for use with mobile devices and provides online marketing and customer data analysis.

Intel’s server business has seen double-digit growth in China over the past five years according to a report by PCWorld, as Chinese governments and financial services companies are leading a massive wave of cloud investment and adoption.

“The age of cloud computing has come,” Xu Shengyuan, general manager of Intel Capital China said. “We won’t necessarily invest in a product a consumer ends up buying. We are still a technology company, so we are more interested in the technology.”

Last year a Netcraft report noted the fast growth of China’s cloud market, and a Gartner report predicted over $20 billion in Chinese IT spending growth for 2013. The industry has responded with gold-rush enthusiasm.

Amazon plans to add a China cloud computing region this year, and other cloud service providers like Savvis moving into the market have been reported regularly by the WHIR.

Offering cloud services or products in China usually requires partnership with local companies, as was the case for hardware maker EMC, and for IBM, which partnered with 21Vianets and iSoftStone in separate deals.

Intel Capital is also seeking to invest in China in wearable technology components, according to PCWorld.

Intel’s investment in Chinese cloud companies represents a third way into the lucrative market.

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