Baidu to benefit from Chinese cloud computing payout

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China’s biggest search engine provider, Baidu, will receive more than 100 million yuan as part of the Chinese government's efforts to boost the development of cloud computing services in the country. Baidu is one of 15 private sector companies benefiting from a new government pot of around 660 million yuan (£66m) to be distributed by the country’s top economic planner early in the new year.

The funds, the first batch of their kind distributed by a public sector department in China, will be designated to 15 cloud computing programs scattered across the country's five cloud-computing pilot cities of Beijing, Shanghai, Shenzhen, Hangzhou and Wuxi.

Internet giants Alibaba will also receive more than 100 million yuan to lead new cloud computing projects, with several other companies, including Shanghai East-China Computer Co. Ltd and Beijing Teamsun Technology Co. Ltd, received some 15 million to 20 million yuan, a report from the China Securities Journal stated.

However, it is Baidu who are likely to benefit most from the Chinese Government’s sudden surge in cloud computing activity, having already set up a number of initiatives to cater for a Chinese cloud market.

In early September, the search giant launched its first cloud-based mobile operating system, Baidu Yi. The platform enables third-party application developers to create and distribute apps such as games, maps and other tools.

And the company’s Chief Financial Officer Jennifer Li also confirmed today it was seeking potential acquisitions and investment opportunities in the mobile and cloud computing spaces.

Baidu currently caters to about 80% of all search market in China. The company has bolstered its position in China, especially after Google’s exit from the market over censorship laws.

It remains to be seen how the pot of money will be spent, however, and whether, in a country with a population of over 1bn, £66m will really go to any lengths to develop comprehensive cloud strategies.

The Asia Cloud Computing Association recent reported that investment in Cloud computing projects in China was expected to reach US$154 billion over the coming few years. And according to KPMG, China Mobile on its own has planned investments of $52 billion over the next three years to expand its cloud offering nationwide, making the current cash release seem like a paltry amount in comparison.


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