SAP and China Telecom to promote cloud services in China:

German software giant SAP has announced plans to expand its strategic partnership with China Telecom into the field of cloud computing.

Under the agreement, China Datacom – a joint venture between SAP and China Telecom subsidiary China Communication Services (CCS) – will offer SAP’s cloud services to businesses in China.

According to SAP’s statement, CCS will also become the first local customer of SAP’s cloud services.

SAP (Walldorf, Germany) and China Telecom (Beijing, China) originally teamed up in 2011 and have worked largely on promoting mobile development and device management.

They say the first cloud solutions they will make available will include a suite of “human capital management” (HCM) solutions from SuccessFactors, an SAP subsidiary, which would make SAP the first international software vendor to provide integrated cloud HCM offerings in China.

“Through the cooperation with China Telecom and CCS, we are now able to provide world-class cloud solutions from SAP to our customers in China, from a data center in China,” said Bill McDermott, SAP’s co-chief executive. “This is a significant milestone in our ‘Innovation in China for China’ strategy and our long-term commitment to the Chinese market.”

China Telecom described the strategic arrangement as a “win-win” that would allow each company to take advantage of the other’s resources and speed up the introduction of cloud services by Chinese enterprises.

“Currently, China Telecom has two major cloud bases in Inner-Mongolia and Guizhou Province, four data centers in Beijing, Shanghai, Guangzhou and Chengdu, as well as the end-to-end data capability covering Asia, Europe, America, Africa and Oceania,” said Yang Jie, China Telecom’s president. “China Telecom’s high-quality and reliable cloud infrastructure and IaaS service will help ensure that the value of cloud solutions from SAP is fully demonstrated, which will support more Chinese enterprises in their technical transformation and business innovation with the market-leading, end-to-end cloud service.”

According to CCID Consulting, the move gives SAP the potential to become a “heavyweight” in the Chinese SaaS market.

“After nearly three years of market cultivation, China’s cloud computing market has moved from a speculative concept to becoming a real business opportunity,” said He Jian Ying, CCID Consulting’s vice president. “The cloud-based applications market in China is expected to grow at 34.6% and exceed RMB80 billion ($13.1 billion) by the end of 2013.”