News Worms
News Worms


Amazon sells part of Chinese cloud computing business

Amazon sells part of Chinese cloud computing business

Specifically, the cloud computing division called Amazon Web Services (AWS) is giving up "certain physical infrastructure assets to" Beijing Sinnet Technology Co, like computing equipment, reports Reuters, citing an Amazon spokesman.

Sinnet said in a regulatory filing on Monday that the purchase, which is still pending, would help it "comply with China's laws to further improve the company's AWS cloud services" in terms of quality and security. "‎We're excited about the significant business we have in China and its growth potential over the next number of years". Amazon's Chinese equivalent, Alibaba, leads the way having launched its own public cloud service in 2009 before expanding globally. Laws that came into effect in June require firms to store data locally. He added the move was necessary for AWS to build up its other business areas in the market.

The 2 billion yuan (US$301.2 million) transaction was arranged in order to comply with national security laws that prevent non-Chinese companies from owning certain critical infrastructure assets, including those involved with the delivery of cloud services.

Legal reasons appear to be the reason that Amazon is offloading the business. Companies targeted by the regulations are required to carry out a security self-assessment or obtain approval from the relevant regulator before transferring the controlled data overseas. Sinnet urged its customers to avoid using virtual private networks (VPNs), which outsmart China's Great Firewall.

Amazon's decision casts a shadow over similar ventures in the country. Microsoft, Oracle and IBM did not immediately respond to request for comment on Tuesday.

According to Synergy, 80% of China cloud services are provided by China companies and about 50% of China based data centres are owned by China-based organisations. Microsoft operates its Azure cloud services unit in partnership with China-based 21Vianet Group.

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