Economy

Amazon To Sell Part Of Cloud Computing Business for $301 Million

Amazon To Sell Part Of Cloud Computing Business for $301 Million

Amazon Web Services is selling part of its public data cloud business in China to its local partner Beijing Sinnet Technology, according to a stock market filing by Beijing Sinnet.

Amazon is selling a portion of its business to a Chinese technology company for roughly $300 million in order to comply with law in that country, according to multiple recent reports.

"‎We're excited about the significant business we have in China and its growth potential".

The deal could be linked to increasing regulatory scrutiny from the Chinese government who is trying to tighten their grip on the internet in the country.

"This move is mostly around regulatory compliance", said Charlie Dai, Beijing-based analyst at Forrester Research.

AWS has a separate hardware venture in partnership with the Ningxia provincial government in China's northwest. Laws that came into effect in June require firms to store data locally.

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Legal reasons appear to be the reason that Amazon is offloading the business. Sinnet asked its customers earlier this year to stop using virtual private networks, which are able to circumvent China's Great Firewall. But the US company has to deal with lawsintroduced this year that mandate the storage of data within the country and bolster government control over the movement of information.

With Alibaba's cloud services expanding rapidly, it looks as if China is resolved to sit on its own cloud.

Other legislation sees it work with Sinnet but also ChinaNetCenter, which provide the internet data centre and ISP services to deliver AWS's cloud. Microsoft, Oracle and IBM did not immediately respond to request for comment on Tuesday.

AWS launched in China back in 2013, partnering with both ChinaNetCenter and Sinnet at launch.

Whereas AWS is the public cloud leader globally, it has struggled to crack a Chinese market that has traditionally been served by its own tech firms.