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Pros and Cons of Business Prospects in Internet of Things and Cloud Computing 9.6.2011 8:30-12:00 Finpro, Auditorium, Porkkalankatu 1, Helsinki Deze Zhao, Lic. in Tech., Aalto University, School of Science and Technology +358 50 5757618 [email protected] Contents • • • • Chinese Market and 12th Five-Year Plan Why go to China Challenge and Strategy A brief review on the development 2004-2010 of Finnish and Chinese Software Businesses and their contributions to GDP • Business Co-operation and Co-innovation between Chinese and Finnish China 12th Five-Year Plan (FYP) • The 12th Five-Year Plan for National Economic and Social Development, released 16.03.2011 • 7 New Strategic Emerging Industries (SEIs) – energy-saving environmental protection next generation of information technology – biotechnology – high-end equipment manufacturing – new energy – new materials – new energy vehicles China 12th Five-Year Plan (FYP) • New strategic emerging industries (SEIs) will add 8% to GDP • Next generation information technology (NGIT) – Next generation of mobile communications – 3-networks convergence (telecom, Internet, TV-nets) – Cloud Computing – Internet of Things • The government plans to promote the investments in R&D of the "Internet of things (IoT)", cloud computing • Sensor networks and IoT R&D center in Wuxi, Nov. 2009 • China Cloud Computing Technology and Industry Alliance (CCCTIA), Jan. 2010 How popular of cloud computing now? Source: China’s Pragmatic Path to Cloud Computing, Accenture and Chinese Institute of Electronics, May 2010 Opportunity of Finnish Companies or Stakeholders • According to 12th Five Year Plan: • Besides cloud business and Internet of Things • e-business, e-government, e-banking, e-payment, etc. • Especially, Networks and Information Security • Law legislation, information security standards and certification, and accreditation systems • Information security and protection, risk assessment system Why go to China ? • Second largest economy in the world, but China needs industry upgrading • Plenty demands of applications in example: smart grid (future), traffic jam control (imminent), such as in Beijing • SMEs of 4.3 millions in 2010 (60% GDP, 75% job market), cloud business in ERP, Finance & Banking, etc. • While entering Chinese market Finnish Companies enhance their techs and competitiveness also • A failed business campaign for example: logistic ERP system in China, needs the transportation optimization. Finland no huge jams, and very high importance of traffic optimization needs Challenge and Strategy • China companies techs cover and reach almost every area • Strong local competitors in tech and good customer relationship (more threats) • IPR issue, e.g., Z-Park (Zhongguancun National Innovation Demonstration Zone, Beijing), ‘A scheme of patents sharing alliance among Chinese companies’ • Speed up R&D, overcome the patent barriers, or a sort of money laundering club? • How Finnish will do: Technology Alliance / China Business Alliance in IoT or Cloud Computing? Software Business Revenue (No third-party, In-house, embedded software, etc.) Source: Finnish Software Industry Survey 2010 Ministry of Industry and Information Technology, China Total Revenue Meur 4000 3000 2316 3090 3059.1 2006 2007 Year (Finland) 2008 2009 2000 1000 0 Total Revenue 100Myuan 2547 2985 2728 2004 2005 6000 4208 4000 3165 2000 799* 0 2004 1299* 1487* 2005 2006 3291.5 2017.3 2007 2008 Year (China) 2009 2010 Software Products Revenue Contribution to GDP (Statistics of Finland and China) Business Co-operation and Co-innovation between Chinese and Finnish • Where is your customer and partner? • Traditional way of market entry: contact local customers directly, reseller, etc. • The cooperation with prospect R&D Labs in companies, institutes, universities – The Labs in China Mobile, China Unicom, State Grid, and key labs in research institutes and universities – The Labs have good local contacts and customer relationships – Some Chinese Labs are business oriented, less in R&D • High-Tech Parks in Beijing, Shanghai, Wuxi, Shenzhen, etc. • China government influenced or supported demonstration projects • Consider the influences of Nokia, Kone, Kemira, Metso, etc. Thank You! Special thanks to: Timo Nyberg: Senior Fellow, Software Business Lab., Industrial Engineering and Management Department, Aalto University Runhua Lin: Deputy Secretary General of Chinese Institute of Electronics, Secretary General of Chinese Cloud Computing Experts Committee