Big data storage business to expand exponentially (2)

Data storage companies' first customers in China were financial institutions such as banks and insurance companies that have gathered a massive amount of customer information and hope to develop better customer relationships.

Large manufacturers and a number of local governments quickly followed because they, too, have huge amounts of unstructured data to handle on a daily basis.

Currently, most of NetApp's customers are in first- and second-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen. The company said it will increase investment in smaller cities including Xi'an, Shenyang and Jinan in 2013 because of the strong demand.

Chan pledged to add more than 30 percent more investment in the nation's second- and third-tier cities in the next fiscal year, which starts in May 2013.

Chan predicted his major customers will remain in financial, manufacturing and local governments because of the company's limited resources for expansion into other industries.

"The government will encourage the development of industries that can boost domestic demand and improve people's livelihoods. Based on this observation, the industries we currently serve have a lot potential for us to explore," he said.

One of NetApp's biggest jobs is to expand its market share in China. The company only had about a 10 percent share of the nation's data storage market at the end of 2012.

It says it has about 20 percent of the global storage market.

"In China we have to exceed by two to three times the industry's annual growth rate in the coming years in order to catch up with the company's global average market share of about 20 percent," said Chan.

He expects cooperation with other players in sectors such as cloud computing and data analysis will fuel its China business.

"We have teamed up with Microsoft Corp and Cisco Systems Inc so we can provide a fully integrated data storage solution rather than just a metal box for data storage," said Chan, adding that the move will attract more customers who expect to see an overwhelming boom in data in coming years.

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