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.
Amazon was a late entrant to the Chinese cloud market which is dominated by local players like AliCloud and China Telecom. Due to compliance issues, Amazon began operating AWS services in 2016 through its partner Sinnet. Amazon has not yet provided the reason behind this exit, but it may be due to the tightening rules on foreign data and cloud services by Chinese regulators.
Contrary to these developments, speaking at the Microsoft Tech Summit 2017 in Beijing earlier this month, Microsoft CEO Satya Nadella announced that Microsoft will triple the capacity of Microsoft Azure operated by 21Vianet in China in the next six months. Satya said that this new capacity will enable more customers in the China region to extend their business using the scale, power, and secure infrastructure of the Azure cloud.
Since its launch three years ago, Azure has been growing rapidly in China. Microsoft highlighted that there are over 1,000 cloud partners and 80,000 enterprise customers in China. Some well known Azure enterprise customers in China include Xiaomi, Haier, Lenovo, Mobike and Huawei. Despite the rapid growth, Azure is still a small player in China and they are in No.5 position with about 7% market share.
Amazon rejected the report with the following statement:
“AWS did not sell its business in China and remains fully committed, we’re excited about the significant business we have in China and its growth potential over the next number of years.”