Chinese startups ditch Oracle, IBM for home-made tech

Bloomberg

For years, companies like Oracle and International Business Machines (IBM) invested heavily to build new markets in China for their industry-leading databases. Now, boosted in part by escalating US tensions, one Chinese upstart is stepping in, winning over tech giants, startups and financial institutions to its enterprise software.
Beijing-based PingCAP already counts more than 300 Chinese customers. Many, including food delivery giant Meituan, its bike-sharing service Mobike, video streaming
site iQIYI Inc and smartphone maker Xiaomi Corp are migrating away from Oracle and IBM’s services towards PingCAP’s, encapsulating a nation’s resurgent desire to Buy China.
PingCAP’s ascendancy comes as the US cuts Huawei Technologies Co off from key technology, sending chills through the country’s largest entities while raising questions about the security of foreign-made products. That’s a key concern as Chinese companies modernise systems in every industry from finance and manufacturing to healthcare by connecting them to the internet.
“A lot of firms that used to resort to Oracle or IBM thought replacing them was a distant milestone, they never thought it would happen tomorrow,” said Huang Dongxu, PingCAP’s co-founder and chief technology officer. “But now they are looking at plan B very seriously.” IBM, which gets over a fifth of its revenue from Asia, declined to comment. Oracle, which gets about 16 percent, didn’t respond to requests for comment.
China has long tried to replace foreign with homegrown technology, particularly in sensitive hardware — it imports more semiconductors than oil. That imperative has birthed global names like Huawei and Oppo and even carried over into software in recent years, as Alibaba Group Holding Ltd and Tencent Holdings Ltd expand into cloud services. That effort has gained urgency since Washington and Beijing began to square off over technology.
“China has always wanted to use domestic tech and in areas like cloud, it’s been very successful,” said Julia Pan, a Shanghai-based analyst with UOB Kay Hian. “While it wants to use
Chinese chips, its technology is just not there, but when it’s mature enough, they very likely will replace overseas chips with domestic ones.”

Big Data Take-off
Now, a coterie of up-and-coming startups are encouraging Chinese firms to go local. Customers use PingCAP to manage databases and improve efficiency, allowing them to store and locate data on everything from online banking transactions to the location of food delivery personnel.
Backed by Matrix Partners China and Morningside Venture Capital, PingCAP is competing in a sector traditionally dominated by companies such as Oracle and IBM. The market is expected to grow an average 8 percent annually to $63 billion globally in the seven years through 2022.
The startup is one of the newest members of a cohort of open-source database providers such as PostgreSQL and SQLite that are upending the market. Researcher Gartner forecasts that 70 percent of new, in-house applications worldwide will be developed on open-source database management systems by 2022.
PingCAP — mashing the term for verifying a web connection, ping, and the CAP computing theorem — was founded by three programmers whose former employer, a mobile-apps company, was acquired by Alibaba. Inspired by Google’s Cloud Spanner, which pioneered the distributed database model, the trio — Huang, Liu Qi and Cui Qiu — began creating an open-source database management system that would allow companies to infinitely expand their data storage by simply linking more servers to existing ones.
“Think of traditional database mangers like a fixed glass container, every time you run out of storage you have to get a bigger one,” said Huang. “What our system does is that you can link as many cups together as you want.”