IBM intends to set up a Cloud Computing Center in Wuxi, China so dozens of emerging Chinese software companies can tap into a virtual computing environment to support their development.

It appears to be a three-way deal between IBM, Wuxi Tai Lake Industry Investment and Development Company Ltd and the Wuxi municipal government.

IBM is offering Rational development tools, WebSphere Application Server and DB2 running on System x, p and BladeCenter machines managed by Tivoli.

The center will be built with its so-called Blue Cloud technologies to achieve Web 2.0 capabilities such as mashups, open collaboration, social networking and mobile commerce.

Meanwhile, IBM's Haifa Research Lab is also leading a 17-million-euro EU-funded cloud computing initiative called RESERVOIR, for Resources and Services Virtualization without Barriers, to explore deploying and managing IT services across different administrative domains, IT platforms and geographies in support of a service-based online economy where resources and services are transparently provisioned and managed.

It will mean developing new virtualization and grid technologies to support stuff that currently can't be supported like simplifying online entertainment.