Cloud Computing a Threat, and Opportunity, for Taiwan's PC Makers
By JONATHAN ADAMS
Published: June 14, 2010

TAIPEI — When Richard Lee, an electronics magnate, peers into the murky future of cloud computing, he sees both opportunity and challenge.

The company he heads, Inventec, makes laptops, servers and other electronic hardware for Western brands like Hewlett-Packard, using the renowned low-cost Taiwanese manufacturing model. But if all the hype around cloud computing becomes reality, that business model may have to change.

“It might impact our legacy business,” Mr. Lee said in an interview. “But the good news is that it could also push us into new cloud computing opportunities.”

While the term is tossed around in reference to a variety of technologies, in essence cloud computing refers to delivering software, storage and other services via the Web from vast data centers. That is a shift away from the PC-based computing model, in which software is stored on individual machines.

If the supporters of cloud computing are right, the laptops that Inventec makes will become less important, as computing power migrates to server farms and as simpler, cheaper mobile devices like the Apple iPad proliferate. But the servers that Inventec makes could gain a more significant role if they are adapted to the needs of the data centers powering the cloud.

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