IBM Agrees Chinese Cloud Partnership


IBM is touting its cloud service as a way to allay Chinese security concerns about foreign technology

IBM has signed a Cloud-based risk analysis deal with Chinese financial data firm Shanghai Wind Information in an effort to circumvent a growing crackdown on the use of foreign hardware and software by the Chinese government and state-owned businesses.

Shanghai Wind Information is one of the leading providers of financial data, research, information and software in China and the deal will provide the firm with use of IBM’s analytics tools “to better manage financial risks and meet regulatory requirements.” The partnership  could serve as a prototype model for operating in the country.

Cloud Service

The deal will see Wind Info later this year incorporate IBM’s cloud-based risk management software, namely IBM Algo Risk Service on Cloud, and the locally installed IBM Algo One Risk Aggregator directly into the firm’s Trading Terminals.

China © Norebbo Shutterstock 2012“As Chinese financial markets continue to grow not only in size but also complexity, investors from all around the world are looking to invest in this region, and we want to provide them with tools of the highest calibre to enable them to fulfil regulatory requirements and to help maximise returns,” said Jin Jian, vice president of Shanghai Wind Information.

But beneath the corporate speak, IBM is clearly hoping that this deal points to the way it will do business in China in the future.

“This is an innovative deployment model in that IBM never receives client information,” Dr Andrew Aziz, IBM’s director of risk analytics, said in an interview with Reuters.

Aziz added that the new business model “continues to comply with the local laws, including data privacy laws in China and in all countries in which it operates.”

National Security?

IBM hopes for this type of deal are founded on the belief that business between Chinese and Western firms has been hampered by the spying revelations of NSA whistle-blower Edward Snowden.

It does not take into account that the Chinese attitude could be a political response to the US charging five members of the People’s Liberation Army (PLA) in May for alleged cyber-espionage.

IBM is already facing a difficult time in China as its sales in the country have reportedly fallen by 20 percent in the first quarter. In May the Chinese government began pressuring domestic banks to replace high-end IBM servers with similar equipment manufactured within the country, as part of a national security review. IBM is not alone here. Many firms including Apple, Cisco, Microsoft, Symantec, and others have found their products excluded from Chinese procurement projects, on “security grounds”.

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Author: Tom Jowitt
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