World’s leading e-commerce Amazon.com Inc. on Tuesday stated that it is looking to expand its cloud computing business in the world’s second largest economy China. The company revealed that the expansion would be done with a partner as they aim to win shares in a market that is becoming more competitive and highly regulated.
Amazon’s arm that is in charge of that Amazon Web Services (AWS) has announced that it will start offering customer services based out of the northwestern Chinese region of Ningxia with the help of local firm and partner Ningxia Western Cloud Data Technology Co Ltd (NWCD).
In a statement, the U.S firm stated that “AWS has formed a strategic technology collaboration with NWCD, and NWCD operates and provides services from the AWS China Ningxia Region, in full compliance with Chinese regulations.”
This move comes just barely a month after AWS announced that it is planning to sell the hardware assets of its Beijing-registered cloud unit for up to 2 billion Yuan ($302.06 million) to another of its partner Beijing Sinnet Technology Co Ltd due to the new regulations that don’t favour them.
The country rolled out new regulations six months ago that makes it compulsory for foreign firms to store data locally and outsource hardware elements to local partners.
Cloud services have become a very crowded niche and highly competitive in China over the last few year, with local companies such as Amazon’s main rival Alibaba Group Holdings Ltd establishing dozens of data centres in the country over the last one year.
Local firms rake in roughly 80% of the total revenue generated in cloud services in China, according to data that was revealed by Synergy Research Group.
U.S firms like Amazon, Apple Inc. and Microsoft Corp have to go through several regulations to compete. The infrastructure set up by the company in Ningxia was designed and built by NWCD affiliates using specifications provided by AWS, according to an Amazon spokesman.
Even though the services offered by AWS in China is similar to the ones offered in other parts of the world, they are different due to the customer agreements, which is entered with local firms Sinnet and NWCD instead of the parent company AWS.