& cplSiteName &

Amazon Selling Part of Its China Cloud Business for $300M

Scott Ferguson

Amazon is selling off a portion of its cloud computing business in China to a local partner, but the company still plans to compete in what is a growing market for cloud-based services and infrastructure.

On Tuesday, Beijing Sinnet Technology announced that it would buy a portion of Amazon's cloud business for $2 billion yuan or about $301 million, according to CNBC, which cited a regulatory filing from China.

The two companies signed a partnership in August 2016, where Sinnet operates and provides Amazon's cloud technology and related services to customers in and around Beijing. However, according to the November 14 report, Sinnet and Amazon.com Inc. (Nasdaq: AMZN) agreed to the sale to help meet regulations in China regrading foreign-owned businesses.

China is on Amazon's mind
(Source: Amazon)
China is on Amazon's mind
(Source: Amazon)

Despite Amazon selling off part of its China business, it's doubtful the company is planning to stop the expansion of Amazon Web Services Inc. overseas. An Amazon spokesman noted in an email to Enterprise Cloud News:

AWS did not sell its business in China and remains fully committed to ensuring Chinese customers continue to receive AWS's industry leading cloud services. Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services. As a result, in order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet, its longtime Chinese partner and AWS seller-of-record for its AWS China (Beijing) Region. AWS continues to own the intellectual property for AWS Services worldwide. ‎We're excited about the significant business we have in China and its growth potential over the next number of years.

Right now, several analysts' reports indicate that AWS is by far the largest provider of infrastructure-as-a-service (IaaS) technology in the world, which also makes Amazon the largest cloud provider globally. (See For Amazon & Microsoft, the Cloud Keeps Giving.)

Microsoft's Azure public cloud is considered a distant second. (See Microsoft Growing Explosively, but Amazon Retains Huge Cloud Lead.)

However, most of the AWS business is in the US, as well as parts of Europe. In order to keep expanding, the company has to move into other markets, and China is an exceptionally tempting target considering the country's economic scale and recent growth.

Keep up with the latest enterprise cloud news and insights. Sign up for the weekly Enterprise Cloud News newsletter.

There is one issue: Alibaba Group .

The e-commerce company's cloud division -- Alibaba Cloud -- is already considered the top source of IaaS technology in China, and now that company is looking to expand beyond its borders as well, especially in southeast Asia and parts of India. (See Alibaba Cloud Is Surprise Winner in IaaS Sweepstakes.)

This is likely to put AWS and Alibaba Cloud on a collision course over the next few years, as more and more companies turn their infrastructure over to cloud service providers, making the China market even more important especially as the US and Western European markets mature. When one adds in additional competition from Microsoft Corp. (Nasdaq: MSFT), as well as others such as Google (Nasdaq: GOOG), IBM Corp. (NYSE: IBM) and Oracle Corp. (Nasdaq: ORCL), it's clear that Amazon is likely to keep its footprint in Chinas for as long as possible.

Related posts:

— Scott Ferguson, Editor, Enterprise Cloud News. Follow him on Twitter @sferguson_LR.

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
More Blogs from Scott Ferguson
From its roots in industrial farm machinery and other equipment, John Deere has always looked for a technological edge. About 20 years ago, it was GPS and then 4G LTE. Now it's turning its attention to AI, machine learning and IoT.
Artificial intelligence and automation will become more integral to the enterprise, and 90% of all apps will have integrated AI capabilities by 2020, according to Oracle CEO Mark Hurd.
IBM is now offering access to Nvidia's Tesla V100 GPUs through its cloud offerings to help accelerate AI, HPC and other high-throughput workloads.
CIO Rhonda Gass is spearheading an effort to bring more automation and IoT to the factories making Stanley Black & Decker tools and other equipment.
Workday is looking to build out its machine learning and artificial intelligence capabilities with the acquisition of startup SkipFlag.
Featured Video
From The Founder
Light Reading founder Steve Saunders talks with VMware's Shekar Ayyar, who explains why cloud architectures are becoming more distributed, what that means for workloads, and why telcos can still be significant cloud services players.
Flash Poll
Upcoming Live Events
May 14-16, 2018, Austin Convention Center
May 14, 2018, Brazos Hall, Austin, Texas
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 7-8, 2018, London, United Kingdom
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
All Upcoming Live Events
Hot Topics
I'm Back for the Future of Communications
Phil Harvey, US News Editor, 4/20/2018
BDAC Blowback – Ex-Chair Arrested
Mari Silbey, Senior Editor, Cable/Video, 4/17/2018
Verizon: Lack of Interoperability, Consistency Slows Automation
Carol Wilson, Editor-at-large, 4/18/2018
AT&T Exec Dishes That He's Not So Hot on Rival-Partner Comcast
Mari Silbey, Senior Editor, Cable/Video, 4/19/2018
US Govt. Bans Domestic Component Sales to ZTE
Dan Jones, Mobile Editor, 4/16/2018
Animals with Phones
I Heard There Was a Dresscode... Click Here
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Twitter Feed