Amazon admits sale will help AWS comply with local regulations introduced earlier this year
Amazon Web Services (AWS) has sold some of its Chinese cloud assets in a bid to comply with increasingly strict regulations in the country.
The company’s Chinese partner, Beijing Sinnet Technology co, has purchased the assets for $300 million but Amazon will retain the intellectual property.
A Cyber Security Law (CSL) came into effect back in June, requiring certain companies to hold data within China and to undergo on-site security laws.
Furthermore it adds additional restrictions on cross-border data transfers. Companies targeted by the regulations are required to carry out a security self-assessment or obtain approval from the relevant regulator before transferring the controlled data abroad.
This would naturally make life extremely difficult for technology firms and their international customers.
AWS launched in China back in 2013, partnering with both ChinaNetCenter and Sinnet at launch. It also has plans for a new region in Hong Kong to serve the Asian market.
Amazon has confirmed to Silicon that it made the sale to comply with local law but stressed it is remaining in the country.
“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. “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.”
Whereas AWS is the public cloud leader globally, it has struggled to crack a Chinese market that has traditionally been served by its own tech firms. Amazon’s Chinese equivalent, Alibaba, leads the way having launched its own public cloud service in 2009 before expanding globally.
More recently, telecoms equipment giant Huawei announced plans to take on AWS and Alibaba with its own cloud platform.