Amazon Sells China Cloud Business as Online Controls Tighten

[bill]

http://www.nasdaq.com/article/amazon-sells-china-cloud-business-as-online-controls-mount-cm876837 [nasdaq.com]

Amazon Sells China Cloud Business as Online Controls Tighten

Amazon has agreed to sell its cloud computing business in China for about $300 million. The move is a response to the Chinese government's increasing control of the Internet and web services.

...

International companies are having to choose between the kind of compliance that requires them to give backdoor access to the Chinese authorities or to exit the country. Google previously quit the Chinese search-engine business in 2010 when it became clear that the government expected the company to conduct censorship on its behalf. But others are expected to fall into line. Apple, Microsoft, Oracle and IBM all have cloud computing businesses in China.

This is further fallout from when we noticed when China began cracking down on domains [webmasterworld.com]. These regulations are going to make some companies re-think their China strategies.

The Amazon withdrawal is a bit of a bummer, as I had considered that as a possibility for a project, but as that's now off the table I have to consider other options. I don't see this as having a positive impact on the Chinese market.

[keyplyr]

Interesting. China's biggest asset is 1.4b potential internet users. The 800lb gorilla seemingly gets whatever it wants.

[TorontoBoy]

In China there is also the issue of forced technology transfer from foreign companies to their Chinese partners. This forced tech transfer is then given to Chinese competitors for the benefit of China. I can see why Google would disagree with such a lopsided deal. It is difficult to say which companies are forced to work with the Chinese government. For sure Tencent and its QQ and WeChat platforms have been proven as tools to the Chinese government.

I wonder if Amazon basically decided the deal was detrimental to its long-term tech and company health? Alibaba has already said they want to be the world's biggest cloud provider, and any help from Amazon would be most welcome.

The e-commerce giant said Tuesday that it sold the infrastructure behind its Chinese public cloud business to its existing partner, Sinnet, in a deal valued at up to $300 million. Amazon Web Services will continue to own the company's intellectual property.

In the past all state owned companies had to have a member of the Communist Party on the board. Unthinkable in the West, this has started to be true for large private companies as well. China is tightening its domestic hold, and trying to buy foreign companies abroad.

[bill]

Wonder what will happen to the cloud services of Apple, Microsoft, Oracle and IBM. They must be weighing their options now as well. I doubt Amazon will be the last to exit this market due to these regulations.