IBM 'unaware' of server ban

By Gao Yuan (chinadaily.com.cn) Updated: 2014-05-28 12:12

The IBM logo is seen outside the company's offices in Petah Tikva, near Tel Aviv,the second most populous city in Israel on Oct 24, 2011.[Photo /Agencies]

IBM Corp was "not aware of" any Chinese government policy to remove its servers from banking industry, the United States company said on Wednesday.

Big Blue's response came after a Bloomberg report claimed that industry regulators, including the People's Bank of China and the Ministry of Finance, are reviewing a new rule to make the nation's commercial banks stop using IBM servers because of potential security risks. The report cited anononymous sources.

China Daily contacted Chen Wenxiong, director of technology risk management office at China Banking Regulatory Commission, to confirm the news but he said that he had "no idea" about the new policy and refused to comment.

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"In fact, news reports now state that China's National Development and Reform Commission has not heard of any alleged directive to that effect," said IBM, adding that it has been a "trusted partner" in China for more than 30 years.

Although it remains unclear if China is really ousting IBM servers from key industries, local vendors are getting a more favorable look in government procurement deals.

Stocks of Chinese server manufacturers surged on Wednesday morning because they are expected to be the biggest beneficiaries if the policy is officially made public.

"It is common for every country to purchase home-made technologies," said Kitty Fok, managing director of research firm IDC.

Background:

IBM sold its lower-end server unit to Chinese personal computer maker Lenovo Group Ltd for $2.3 billion in January. The deal is currently under review in many counties, including the US and Canada. The acquisition will be completed later this year, said Lenovo.

In March, a massive strike hit IBM's to-be-sold x86 server factory in southern Guangdong province because of labor disputes.

IBM still provides high-end server such as System z and Power architecture-based product line.

Its major customers in China are banks, insurance companies and brokers. But IBM never releases exact market share.

The company's other China business -- including ones with heavy government evolvement – seem to operate as usual despite the server story.

IBM is scheduled to sign a deal with local governments on providing air pollution monitoring solutions in several cities, including Beijing, the capital and seat for all major government organizations.

Other US technology companies are also feeling pressures in China as tensions over Sino-US cyber security issues increase.

The State Internet Information Office lunched a cyber security review on products used in critical industries last week to keep in check important information at governments and State-owned enterprises.

Cisco Systems Inc told China Daily it will take "active measures" to safeguard product safety and reliability after the new regulation was announced.

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Microsoft described the step as "extremely unexpected".

Most of the moves from the Chinese part came after the US accused five Chinese military officials of stealing business information from US companies.

China denied the accusations, saying they were "made up".