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Amazon’s denies Cloud leaves China

by on14 November 2017

Web services have not been sold off

Amazon has denied that it has given up on trying to provide its lucrative cloud services in China and has flogged off the operation to its Chinese partner.

Beijing Sinnet Technology said it would buy Amazon’s Chinese web services business for up to $301 million, effectively killing off the US firm’s cloud-computing business in the country.

Sinnet, which began operating the Amazon services in August 2016, said in a filing late on Monday the pending purchase would help the unit “comply with local laws and regulations and further improve service quality and security”.

However AWS has denied it all.  A spokesman told Fudzilla that only some physical infrastructure had been flogged off:

“No, AWS did not sell its business in China and remains fully committed to ensuring Chinese customers continue to receive AWS’s industry leading cloud services.  Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services.  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.  AWS continues to own the intellectual property for AWS Services worldwide. ?We're excited about the significant business we have in China and its growth potential over the next number of years.”

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

In August, Sinnet told customers it would begin shutting down VPNs and other services on its networks that allow users to circumvent China’s Great Firewall, citing direct instructions from the government.

The changes are linked to new national cyber laws that came into effect in 2017, which make network providers liable for content deemed dangerous or offensive to “socialist values”.

In 2013 Amazon’s web services business signed agreements with provincial governments in China, and has previously worked with some of China’s largest tech firms including Xiaomi, Qihoo and Kingsoft.

Amazon rules the world when it comes to web services but it looks like the Chinese have carved off a little bit of its glorious empire.

Chinese cloud services are crowded and competitive with Alibaba Group cloud unit opening over a dozen overseas data centres since 2016.

Last modified on 14 November 2017
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