China Is Sitting On The Cloud

Is all that other stuff you are doing really important?. If it's not frankly stop doing it. Image ALotOfPeople Getty Images  iStock

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. Sinnet said in the filing that the deal will help the service "comply with local laws and regulations and further improve service quality and security". "‎We're excited about the significant business we have in China and its growth potential over the next number of years". If the company intends to continue functioning in China, it has to cooperate with local partners, that often have some degree of government oversight, an AWS spokesman explained.

Amazon Web Services (AWS) has sold some of its Chinese cloud assets in a bid to comply with increasingly strict regulations in the country. Sinnet urged its customers to avoid using virtual private networks (VPNs), which outsmart China's Great Firewall.

Amazon's cloud business in China already faced tougher rules due to China's tight internet controls.

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.

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 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.

Microsoft, Oracle and IBM are likely to follow suit. Chinese firms account for roughly 80 percent of total cloud services revenue in China, and roughly half of the data centre market in 2017, according to Synergy Research Group.

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