China Is Sitting On The Cloud

Ivan Schwartz
November 15, 2017

In a statement to TechCrunch, the online retail giant said it is not parting ways with its business in China, and will continue to offer the industry-leading cloud services to its customers in China.

The e-retailer added that it sold its physical assets of AWS to Sinnet in order to comply with the Chinese law.

Amazon said that it will sell few physical assets only and own the intellectual property of Amazon Web services (AWS) worldwide.

Amazon was a late entrant to the Chinese cloud market which is dominated by local players like AliCloud and China Telecom.

Beijing Sinnet Technology said Tuesday it would buy parts of Amazon's (NASDAQ: AMZN) cloud business in China for up to two billion Chinese yuan ($301 million U.S.), but the USA e-commerce giant said it was not exiting the world's second-largest economy. "‎We're excited about the significant business we have in China and its growth potential over the next number of years".

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The arrangement between Amazon and Sinnet appeared to mirror a similar set-up between Microsoft and its local partner 21Vianet Group Inc., IDC China managing director Kitty Fok said.

"This move is mostly around regulatory compliance", said Charlie Dai, Beijing-based analyst at Forrester Research. Laws that came into effect in June require firms to store data locally. But the USA company has to deal with lawsintroduced this year that mandate the storage of data within the country and bolster government control over the movement of information. This year in August, Sinnet told customers that it would shut down the VPNs and other services on its networks that helped users to get over China's Great Firewall.

AWS has a separate hardware venture in partnership with the Ningxia provincial government in China's northwest.

AWS launched in China back in 2013, partnering with both ChinaNetCenter and Sinnet at launch.

More recently, telecoms equipment giant Huawei announced plans to take on AWS and Alibaba with its own cloud platform.

Other reports by GizPress

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