"No, AWS did not sell its business in China and remains fully committed to ensuring Chinese customers continue to receive AWS’s industry leading cloud services. Chinese law forbids non-Chinese companies from owning or operating certain technology for the provision of cloud services. As a result, in order to comply with Chinese law, AWS sold certain physical infrastructure assets to Sinnet, its longtime Chinese partner and AWS seller-of-record for its AWS China (Beijing) Region. AWS continues to own the intellectual property for AWS Services worldwide. We’re excited about the significant business we have in China and its growth potential over the next number of years."
Two things I take away from this.
1. Amazon decided that the risk of doing business in China (handing over information & know-how to the government, helping it suppress the human rights of its citizens, etc) was not worth the revenue that it would make.
2. It sold for $300 million. That means its run-rate was probably only $50 million a year or so annually (or maybe less). That's not very much at all, given that AWS' annual global business is about $10 billion and rising (so China's cloud share accounted for less than 0.5% of AWS global cloud business.)
I think WSJ misinterpreted this. Sounds like a bit of an ownership shift, but Sinnet will still pay AWS to operate the regions.
Does this deal include datacenter/HW designs? Software? Operational practices?
Seems like a pretty massive technology transfer.
Reports that #AWS is exiting its China business are completely wrong. Sinnet transaction is to meet Chinese regulatory requirements. #AWS remains committed to provide its service in China. - Werner Vogels
> The buyout was an attempt to “comply with our country’s laws and rules and further improve the security and the service quality of the AWS cloud-computing service operated by the company,” Beijing Sinnet said.
This was long time coming:
Though I wonder how are the acquiring companies funded? And if China can continue doing this long term.
What a misleading title.Beijing Sinnet is just a shell company of amazon china(The same as Guxiang which is a shell company of google in china).
It may be worth pointing out that AWS China supports about 10% of the services one may find in other AWS regions--and not even basic features like MFA for root or IAM accounts.
AWS continues to own the intellectual property for AWS Services worldwide
Mmmm, does China care about who owns the intellectual property? That's a first
Looks like AWS finally realized their security offerings like encryption at rest, KMSes, ACM etc were incompatible with China's datacenter laws. None of the AWS offerings would have any credibility if they all had backdoors even in one region. Think some of them can't even be backdoored.
very interesting. I wonder what they are really transferring? Infrastructure only or software stack as well? Who is operating after the sell? I am involved in the IBM Wanda partnership that is currently occurring and am curious about other companies experiences in China.
Non-paywalled version: http://m.nasdaq.com/article/amazon-to-sell-china-cloud-servi...
Yet another company driven out of China by government-industry collusion.
A somewhat misleading headline. Only the "Amazon Web Services' China business"
Most likely it is fake news or at least misinterpreted by stupid reporter. I bet it is paperwork trick so AWS can work around local laws. Alipay did the same a few years ago. There is no way AWS can sold it’s cloud service. Let alone AWS is announcing second China region soon.
I guess Jeff Bezos still need to learn few things from Jack Ma. Would be cool to read the inside stories.