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

Amazon to sell China cloud services unit in $300 million deal

Amazon to sell China cloud services unit in $300 million deal

Both the Wall Street Journal and Reuters had reported that the China partner had notified investors that it was about to buy AWS's China business for 2 billion yuan ($301.2 million). Microsoft already operates its Azure cloud service in China with the China-based company 21Vianet Group.

"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.", said a spokesperson.

One analyst based in Beijing said that the move by Amazon was mostly due to regulatory compliance.

"AWS continues to own the intellectual property for AWS services worldwide".

In August Sinnet told customers it would begin shutting down VPNs and other services on its networks that allow users to circumvent China's Great Firewall, citing direct instructions from the government.

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Whereas the European Union sees foreign cloud services as a source of revenue - fining them billions whenever they can think up some legal infraction they may have committed - China is obliging foreign cloud service providers to sell their assets to China-based companies which come under state control.

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.

Amazon's decision casts a shadow over similar ventures in the country. The rule makes it hard to use data globally, greatly complicating operational strategies for many overseas companies, and countries including the USA have voiced concerns about the legislation's enforcement. Foreign firms have repeatedly complained about the biased regulations in China that favor the local companies. "The Chinese government is blatantly flaunting the rules of trade, including but not limited to their completely unreasonable rules on cloud computing".

Amazon shares acquired 50 cents to $1,129.67 mid-morning Tuesday.

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