How EMC's China Research Group Got Its Mojo

Posted by: Steve Hamm on October 02

Back in June, before I took off on my crazy reporting swing through Asia and Africa, I wrote about how Steve Leonard, EMC’s president of Asia Pacific and Japan, is trying to get the right mix of local and corporate management and culture in his region. Recently I spoke to Charles Fan, vice president and GM of EMC’s China Development Center, to get the view from the field. It was a relatively quick conversation, but I came out of it feeling that Fan is on his way to mastering the art of setting up an off-shore research operation that’s tightly connected to the corporate mothership.

In just two years Fan has built a staff of 600 in Shanghai and Beijing offices. Unlike some off-shore tech operations run by other companies, they're not just doing scut work. They're helping to design important new products for the Chinese and global markets.

Here's how Fan did it: He came to EMC in 2005 when it bought Rainfinity, a file virtualization company that he had co-founded. In early 2006, EMC boss Joe Tucci called him in to his office and offered him the task of starting up R&D operations in China. Tucci promised him that the China scientists and engineers would work on core technologies, so Fan took the job. Another deciding factor: Fan figured that because Tucci was publicly behind the project, that would help him win cooperation from executives throughout the company.

For three to four months, Fan traveled back and forth between China and the US gathering info. He talked to Microsoft, Google, and Intel about the lessons they had learned from setting up research facilities in China. He found that he had a recruiting challenge. Few Chinese grad students and scientists had heard of EMC. So he put a lot of effort into campus awareness building. Now, he says, EMC is one of the best known names among computer science students.

The other major challenge was integrating the China operations into EMC's global product development network. He got help from Jeff Nick, EMC's CTO, and Steve Leonard--who have been championing this kind of integration. But he also made some smart moves on his own. He set up a management matrix where the teams in the labs reported to him but also had dotted-line connections to the corporate business units for project management coordination. "I wanted the business units to see the work in China as integral to their business, as opposed to something that's outsourced," Fan told me. "I got their buy-in because they have control. We built a hybrid model, and it's working well."

So far, the China lab has done major pieces of the company's cloud computing research, and has helped develop some consumer storage products. It's also helping out with enterprise storage technology and content management software.

Fan is pleased but not satisfied. "In two years, we have been successful in making the first step in establishing China as a core center for the most important initiatives of EMC," he told me. "Now we want to make ever more significant contributions to the key initiatives." That helps him retain employees, since they get to do important work.

Fan spent the early part of his life in Shanghai, but his family moved to the US when we was 17. Now he's back living in Shanghai again, and his pride in China's accomplishments grows by the day. He even volunteered to help out at the Olympics. He was one of those guys in the blue shirts who answered questions for tourists.

As more and more companies develop global innovation networks, Fan's skills and experiences are going to be increasingly valuable. He's a great example of a new type of business person that I'm going to be writing about, the Global Business Citizen.

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