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Unix systems could become less popular behind the Great Firewall

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September 9, 2013

China's own crackdown on Bo Xilai and other scandal-hit Communist Party outcasts may be making Unix systems less popular behind the country's Great Firewall.

At least that's the opinion of EMC's president for Greater China, Denis Yip, who last week told attendees at an EMC Forum event in Hong Kong that the political environment across the border had made IT buyers more careful about where and how they spend their budget. And virtualisation on x86, he said, is the big winner for now.

Overall, China has in recent weeks been gripped by the trial of ex-Chongqing party leader Bo Xilai, in part thanks to the trial court's decision to shared details of the trial on Sina Weibo (often described as China's Twitter).

Yet another high profile trial, of former railways minister Liu Zhijun, saw a suspended death sentence handed out last July.

Both trials have been mentioned by new president Xi Jinping as part of a major crackdown on political corruption and bribery.

EMC's Yip told the Forum that the corruption crackdown means that purchasers of IT are becoming more cautious in China, merely because spending big now attracts a lot of scrutiny.

Buying servers with lots of unused capacity therefore looks suspicious. “The trend is that people are putting new applications on virtualised environments,” Yip added. “Chinese customers are spending less money. People are not willing to spend big money on mainframes, but they are definetely switching to x86 environments.”

Of course, this trend benefits EMC, which is itself transitioning from a traditional storage company to one which can support the cloud and big data era, so a bit of salt seems appropriate here.

Yip added that business in China looks great because the central government has already invested heavily in over 80 City Cloud projects all over the country, with the help of EMC.

Often located in relatively remote areas with no existing IT infrastructure, these projects usually require the building of new cutting edge datacentres from scratch, with EMC aiming to contribute to 1,000 of these over the next five years, Yip explained.

APAC was the fastest growing region for the storage giant last year, growing fourteen percent year-on-year, compared to single digit numbers in other regions, while China grew 20 percent as a whole.

The company wants the PRC as its biggest base outside the U.S. and Yip has set an ambitious five-year target of growing its big data business more than 10-fold and enjoying more than a 50 percent market share of the enterprise class datacentre market.

It won’t all be plain sailing though, with local hero Huawei mentioned several times as a competitor. “In China we’ll be partnering a lot more with local companies, otherwise competing with Huawei will be more difficult,” Yip noted.

EMC’s enterprise storage division president Brian Gallagher says that Huawei mainly competes at the low end, in the block storage segment.

“They’re going after the big fish, Cisco on the networking side and the storage players in the industry,” he added. “We’ll continue to invest in R&D and M&A, however they’re seeing decent growth rates these days, and that's what really counts.”

In other IT news

Some ISPs and many hosting companies have been given a heads-up about some double-digit price hikes due at the start of 2014 and 2015, and the cost increases aren't going down too well for some. And while Microsoft has been slashing the price of its Surface hardware amid a $900 million write-down, the price of its software is going up. Way up.

The Services Provider Licensing Agreement (SPLA) is the latest area to get the special treatment, with hosting companies warned that from January next year, Windows Server Datacenter will rise by a whopping 38 percent under the per-processor licensing model, and by another 13 percent by January 2015.

However, there could be a bit of logic in Microsoft's move here, as the licence will accommodate unlimited virtual machines whereas it used to be restricted to four.

The price of the Windows Server Standard edition won't change in January, but will go up by twenty percent from January 2015 on.

And the Core Infrastructure Suite Datacenter is set to increase by 23 percent from 2014 and another nine percent the following year, and the Standard version will edge up another nine percent from 2015.

The Remote Desktop Services Subscriber Access License (SAL) will also become 20 percent more expensive from January 2014.

The Cloud Platform Suite and the Platform Guest will not be impacted by a price surge, we were told by Microsoft.

Hosting firms that buy Microsoft's wares under the SPLA model already had to deal with a 33.4 percent price rise at the start of this year, and one observer said that the latest change would be a "hard sell" to customers.

"We can't constructively work with Microsoft if it keeps putting up its prices," bemoaned one, who added that in markets where Microsoft has more competition, as it does with Azure in the cloud-hosting game, price cuts were common in the past year, and continue to be the same this year.

In mid-2012, Microsoft increased volume licensing prices for British customers as it harmonized the list price across Europe in line with the Euro.

Earlier this year, it pushed up prices of BizTalk server as well, in the Azure cloud, and the cost of Client Access Licences was bumped up last December.

In other IT news

While Microsoft is preparing itself to go-live with Windows 8.1 on October 18, it's created a big gap between the present and the future that could potentially be a big stumbling block for a whole slew of small and independant ISVs.The company should still be able to create and ship its custom software using old-style installers, but isn't yet ready to have them move into the app-happy world of the TIFKAM Start screen.

You see, Microsoft's antiquated rules are a little odd. If a developer wants to sell software to World+Dog, there's no problem-- just list the app on the Windows Store and hope it sells.

And large enterprises that want to control the apps loaded on Windows 8.1 can still use side-loading, Microsoft's jargon for loading mobile apps from an internal source.

The Windows 8.1 licensing model lets any enterprise with Software Assurance side-load. Alternatively, customers might be large enough to be forking out for the monthly Microsoft InTune subscription, which also includes side-load keys.

If the enterprise has neither Software Assurance or an InTune subscription, it has another option, which is to acquire side-load keys itself.

This is where ISVs will find themselves temporarily stranded between the old world of desktop .exe installs and the new world of apps. Side-load license keys only come in packs of 100, and they're not transferrable, however.

An ISV selling half a dozen licences at a time therefore can't buy a bunch of side-load licences and on-sell them, or even give them away for free for client installations.

For a company that lives by creating custom apps that tightly reflect the needs and often the intellectual property of a specialised customer base, the message right now is that they'll have to live in the world of old-style desktop installation and aren't welcome on the Windows 8.1 Start screen.

Source: EMC.

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