Amazon Web Services denies reports of China exit

UK-lawmakers-say-Amazon

Beijing Sinnet Technology Co Ltd, Amazon's China partner, said in a filing late on Monday that it would buy the USA firm's Amazon Web Services (AWS) public cloud computing unit in China for up to 2 billion yuan ($301.2 million).

To comply with Chinese legislation, however, Amazon sold certain physical infrastructure to its local partner. Microsoft already operates its Azure cloud service in China with the China-based company 21Vianet Group.

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

"‎We're excited about the significant business we have in China and its growth potential". Amazon's Chinese equivalent, Alibaba, leads the way having launched its own public cloud service in 2009 before expanding globally.

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.

AWS has a separate hardware venture in partnership with the Ningxia provincial government in China's northwest. In China, regulations require Amazon to operate via a local partner before offering the services to customers.


Legal reasons appear to be the reason that Amazon is offloading the business.

Big name tech companies in the USA often bend over backward to either attempt to penetrate the highly protected Chinese market, or maintain a somewhat established presence.

Amazon's decision casts a shadow over similar ventures in the country.

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.

Amazon controlled over 40 per cent of the global market for public cloud services in 2016, well ahead of Microsoft Corp and Alibaba, according to Gartner estimates.

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