Amazon Web Services denies reports of China exit

14 Nov 2017


Amazon today rejected media reports tying its asset sale to an imminent departure from the Chinese market.

According to the company, it is selling hardware to comply with laws that forbid ownership or operation of certain types of cloud technology.

''AWS did not sell its business in China and remains fully committed,'' the company said in an emailed statement.

''We're excited about the significant business we have in China and its growth potential over the next number of years.''

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.

However, like its peers, Amazon has found it difficult making headway in China, which is dominated by local tech giants Alibaba and Tencent Holdings Ltd.

Foreign firms in China have long complained about local restrictions that appeared to favour domestic players.

The arrangement between Amazon and Sinnet appeared to mirror a similar set-up between Microsoft and its local partner 21Vianet Group Inc, according to IDC China managing director Kitty Fok.

''Amazon is definitely not giving up on China, in fact they're going to be even bigger here'' because of plans to build another datacenter, she said, Bloomberg reported.

Reuters had earlier reported that Inc is selling off the hardware from its public cloud business in China, amid increased regulation over online data which is creating a hurdle for technology firms operating in the world's second-largest economy.

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

''In order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet,'' an AWS spokesman said today, adding AWS would still own the intellectual property for its services worldwide.

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