IBM Signs Massive Data Center Deal With Chinese Partner

Executives of IBM and China-based Range Technology Development signed the deal on Friday during Chinese President Hu Jintao's state visit last week to the U.S.

The deal calls for IBM to help Range build a new data center stretching across 150 acres in a newly developed economic zone about 30 miles outside Beijing, said Steven Sams, vice president of IBM site and facilities services.

"We're helping open one of the largest data centers in the world," Sams said.

Data centers of this size cost hundreds of millions or billions of dollars to build, Sams said. "They're building a whole city around it to support its operation," he said.

Range will use the data center to offer a wide range of services, including cloud computing and mobile services to customers. Among the customers will be provincial and city governments looking for health-care, transportation, government services and administration system, food and drug safety services, and other services, IBM said.

IBM is helping design and construct the data center, offering the same services it offers all its data center partners, Sams said. Scheduled to open in 2016, it will be built to IBM specifications and international green standards, Sams said.

IBM has been helping design and construct data centers in China since 1997, and counts among its customers the country's five largest banks and other enterprises, Sams said.

Intellectual property rights related to its data center design and construction business are not an issue for IBM, Sams said.

"The designs for Range are unique for them," he said. "They'll own the design. We'll add technology to make it the best, most efficient data center in the world, like we do for any customer. They'll buy it and own it."

The company's data center business in China has tripled in the last four years, and China in 2010 overtook Japan as IBM's second-largest data center market after the U.S., Sams said.

He declined to detail the relative sizes of IBM's U.S. and Chinese data center markets. "But if we're tripling the business (in China) every four years, it doesn't take long to pass anyone," he said. "In time, China will pass the U.S."