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IBM Wins Shanghai Airport Cloud-Computing Contract

June 5 (Bloomberg) -- International Business Machines Corp. won a contract with China’s state-owned Shanghai Airport Authority to use cloud computing to help move traffic more efficiently.

The IBM system, the first phase of which was completed in March, helps the airport manage everything from airplane taxi times to passengers waiting on a concourse, the Armonk, New York-based company said in a statement today. The system dramatically improved the punctuality of flight departures, according to the statement, which didn’t provide specific figures.

The contract gives IBM a boost as it seeks to reverse declining sales in China, where revenue fell 20 percent last quarter, dragged down by declining hardware spending. U.S. companies have also been grappling with tensions over cybersecurity in China after U.S. prosecutors last month charged five Chinese military officers with allegedly hacking into computers of American companies.

China is reviewing whether domestic banks’ reliance on IBM’s high-end servers compromises the nation’s financial security, Bloomberg News reported May 27 citing people familiar with the matter. IBM said last month it wasn’t aware of any government policy against use of its servers. The company’s Shanghai-based spokesman Anthony Guerrieri said today’s announcement is unrelated to any government reviews.

Shanghai Airport

“We are proud to be selected by Shanghai Hongqiao International Airport as its trusted partner,” Ernie Hu, IBM’s vice president for its software group in China, said in the statement. “IBM has a long history of innovation in transportation, working with the world’s leading airlines and airports.”

IBM was little changed at $184.23 at 10:10 a.m. in New York.

The system supplied to the Shanghai Airport Authority, which operates the city’s Pudong International Airport and Hongqiao International Airport, features IBM’s DB2 data server, and the Tivoli Directory Server and Security Identity Manager, according to IBM’s statement today.

IBM Chief Financial Officer Martin Schroeter has said the company’s challenges in China are related to the normal cycle of upgrades for hardware such as servers. While IBM doesn’t break out sales figures by country, 14 percent of its 2013 revenue came from the Asia-Pacific region excluding Japan, according to data compiled by Bloomberg.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editors responsible for this story: Michael Tighe at mtighe4@bloomberg.net Crayton Harrison, Sarah Rabil

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