Amazon To Sell Part Of Cloud Computing Business for $301 Million
Nov 14 2017 by Johnny Bowman
A spokesperson for AWS said Tuesday that to comply with the laws in China, AWS sold some physical infrastructure assets to its partner Sinnet, adding that AWS would remain the owner of intellectual property for its worldwide services.
In a TechCrunch article it was explained that Chinese law does not allow certain technologies to be owned by non-Chinese companies, so a transaction was required to continue the partnership between the companies in China.
Amazon is committed to establish in China, and is looking forward for significant business opportunities and growth potential for the next few years.
Reuters today reported that Amazon is going to sell its AWS cloud services unit in China to its partner Sinnet Technology in a $300 million deal.
"Sinnet is responsible for ensuring that its customers in China comply with local laws and their notice was meant to remind customers of their obligations", an Amazon spokeswoman said via email at the time.
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.
Regulators in China have tightened rules on cloud services and foreign data, implementing new measures of surveillance and increasing the scrutiny of data transfer that cross borders. Laws that came into effect in June require firms to store data locally. Amazon said on its website that its public cloud services in the country are exclusively managed by Sinnet. Sinnet urged its customers to avoid using virtual private networks (VPNs), which outsmart China's Great Firewall. 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".
Other U.S. companies such as Apple has also responded to the government's similar demands.
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.