Cisco and TCL to set up $80 mn cloud joint venture in China

Cisco Systems will set up an $80 million joint venture with Chinese hardware manufacturer TCL to invest in cloud computing services.

TCL said in a stock exchange filing on Thursday that Cisco will invest $16 million in the new firm and hold 20 percent stake.

TCL will pay $64 million for an 80 percent share. These investments will be made over three stages, each of which will require the approval of both parties.

The company did not share any timeframe for the investments, Reuters reported.

U.S. technology firms — including Amazon .com, IBM and Microsoft – are also moving into the cloud computing services market in China.

TCL said the new company will build data centers in China, and set up cloud-based video communication and collaborative office systems for Chinese small- and medium-sized enterprises and industry users.

The size of the joint venture may be expanded, based on market needs and the development of the company, TCL said.

TCL, through an offshore affiliate, will name four directors and Cisco will name one. The affiliate will also be responsible for deciding on the core management team.

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Cloud market in India

Meanwhile, IT research agency Gartner said public cloud services revenue in India will grow 34 percent to $638 million in 2014 from $161 million in 2013.

Public cloud services revenue is driven by high rates of growth in key market segments, namely cloud infrastructure as a service (IaaS) and software as a service (SaaS), two of the largest segments in the public cloud services market.

Spending on SaaS will total $249 million in 2014, an increase of 37 percent over last year. Spending on IaaS will grow 33 percent to $77 million during the same period.

Gartner predicts continuing high rates of spending on cloud services in India through 2018 when the market is expected to reach almost $2 billion.

Baburajan K
[email protected]