Amazon sells part of Chinese cloud computing business

14 November, 2017, 18:03 | Author: Leticia Walters
  • Amazon surrenders cheapest bit of Chinese cloud

"Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services".

Reuters today reported that Amazon is going to sell its AWS cloud services unit in China to its partner Sinnet Technology in a $300 million deal.

Amazon is committed to establish in China, and is looking forward for significant business opportunities and growth potential for the next few years.

Chinese regulators are tightening rules on foreign data and cloud services, implementing new surveillance measures and increasing scrutiny of cross-border data transfers.

Charlie Dai, a Beijing-based analyst at Forrester Research, feels that the move was necessary for AWS to improve its other business areas in the market. If the company intends to continue functioning in China, it has to cooperate with local partners, that often have some degree of government oversight, an AWS spokesman explained.

"AWS continues to own the intellectual property for AWS Services worldwide", the company was quoted saying in the TechCrunch report.

Beijing Sinnet Technology, Amazon's partner in China, told customers months ago to stop using illegal virtual private networks (VPNs), which can offer secure, private networks for users, but also circumvent internet censorship in the country.

Microsoft, Oracle and IBM are likely to follow suit.

Foreign firms in China have long complained about local restrictions that appeared to favour domestic players.

Microsoft, Oracle and IBM did not immediately respond to request for comment on Tuesday.

Whereas the European Union sees foreign cloud services as a source of revenue - fining them billions whenever they can think up some legal infraction they may have committed - China is obliging foreign cloud service providers to sell their assets to China-based companies which come under state control.

Chinese firms account for roughly 80 percent of total cloud services revenue in China, and roughly half of the data center market in 2017, according to Synergy Research Group.

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