Amazon's AWS business is reportedly pulling out of China

Chelsea West
November 15, 2017

Analysts said they expect other foreign companies like IBM and Oracle, to ensure compliance with regulators if they want to provide services such as public cloud in China.

The company confirmed that it has sold off its Amazon Web Services (AWS) infrastructure to Sinnet, its local technology partner. 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.

Amazon was a late entrant to the Chinese cloud market which is dominated by local players like AliCloud and China Telecom. Amazon, the global leader in internet computing, is vying for a slice of domestic spending on cloud services and gear that IDC estimates will reach $30 billion by 2021.

Apple, Facebook and Google have all made similar choices, some which show they are essentially selling out to China, a country with a lack of freedoms when it comes to the internet, the natural foundation of these tech companies' operations and services.

It looks like Amazon is removing itself from the Chinese cloud services industry on account of stringent new data laws that went live in the country earlier this year.

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A spokesperson for AWS said Tuesday that to comply with the laws in China, AWS sold some physical infrastructure assets to its partner Sinnet, adding that AWS would remain the owner of intellectual property for its worldwide services.

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

With Alibaba's cloud services expanding rapidly, it looks as if China is resolved to sit on its own cloud. The rule makes it hard to use data globally, greatly complicating operational strategies for many overseas companies, and countries including the US have voiced concerns about the legislation's enforcement.

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.

Other reports by TheSundaySentinel

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