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Beijing Sinnet says it will buy Amazon Web Services’ China business
- gonyea 9y agoYet another company driven out of China by government-industry collusion.
- hndamien 9y agoLooks like Bitcoin is the only "company" succeeding in China.
- adventured 9y agoDisney will probably do ok with their new park, if only because it's only 43% owned by Disney. Apple and Starbucks are among the few still thriving, for now. GM is also still doing ok there, via a typical partial ownership arrangement. McDonald's and YUM! Brands threw in their towels, after initially having booming businesses.
- seanmcdirmid 9y agoStarbucks is also in a JV for tier one cities. They are pushing into second+ tier cities because the Chinese government is letting them do it outside a JV.
- PowerfulWizard 9y agoIt's the playbook. They need competition to drive improvement of their local blessed firm. Once they are globally competitive they can compete internationally and monopolize the China market.
- ForRealsies 9y agoThis is going to sound so ironic regarding what we'll learn about Amazon in the future.
- jellyjellyrobot 9y agoUh oh
- thisisit 9y ago> 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: https://www.nytimes.com/2017/08/01/business/amazon-china-internet-censors-apple.html https://www.nytimes.com/2017/08/01/business/amazon-china-int... Though I wonder how are the acquiring companies funded? And if China can continue doing this long term.
- gonyea 9y agoWhy couldn’t they? No/little international pressure to do otherwise and a currency printing press to subsidize back room deals. This is a great strategy for China and it’s utterly insane that we allow this situation to continue.
- thisisit 9y ago> it’s utterly insane that we allow this situation to continue. That is the point I am trying to make. How long before everyone says this is insane and tries to start blocking deals? Though China's inflation due to currency printing press might come home to roost before that happens.
- coliveira 9y agoIf giving money for business development ever created inflation, the US would not have enough machines to cut the zeros from its currency. Please understand that creating money for productive purposes cannot generate inflation, this is essentially what banks have been doing since they were ever invented.
- underdown 9y agoAdding money to the supply of money causes inflation regardless of the "productive purpose" for which it is used.
- directionless 9y agoA somewhat misleading headline. Only the "Amazon Web Services' China business"
- deleted 9y ago[deleted]
- samspenc 9y agoTwo 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.)
- adventured 9y agoAWS did $4.58 billion this latest quarter. They're tracking to a $20+ billion annualized run-rate.
- samspenc 9y agoThanks for that info! That means AWS's China business accounted for less than 0.25% of its global business (based on sale price.)
- tanilama 9y agoThey never get the chance to expand in China. Most of the time it operates in China, AWS phrases it as 'in preview', that significantly disencharges user adoption, because it is significantly more complicated to go through the registration process that is required by the CCP
- propman 9y agoNumber 1 is especially key, last 2 years US businesses have pulled out of China a lot because of really really sketch actions by the Chinese government. Doesn't hurt to use the totalitarian argument either, but mainly they are losing money. Goldman Sachs, Citigroup sold their stakes last year as well. China will likely start opening up more because Western companies aren't as naive anymore and short term profits for long term losses aren't much of an option anymore now that Chinese companies are well developed in all the tech and economies of scale.
- halite 9y agoI guess Jeff Bezos still need to learn few things from Jack Ma. Would be cool to read the inside stories.
- adventured 9y agoLike how to leverage the state to keep foreign competition out. Let's hope Bezos doesn't learn that lesson. Keeping in mind that half of Jack Ma's wealth derives from one of the greatest thefts in world history, of Ant Financial from Alibaba shareholders (including Yahoo and Softbank). Equivalent to Bezos discharging AWS into his own private hands, without compensating Amazon shareholders. Let's also hope Jeff Bezos doesn't learn that trick.
- kijiki 9y agoDoes this deal include datacenter/HW designs? Software? Operational practices? Seems like a pretty massive technology transfer.
- tryingagainbro 9y agoLooks like they "bought" it but AMZN will license the technology to them so they'll still make some money. Apparently China doesn't want big tech to be non-Chinese in their country and doesn't seem to be hurting. They have their equivalent of everything
- stuffedBelly 9y agoRight. Alibaba Cloud Service can pretty much hold on its own.
- netguy6 9y agoI think WSJ misinterpreted this. Sounds like a bit of an ownership shift, but Sinnet will still pay AWS to operate the regions.
- mechiland 9y agoYes. You know media, they like big title. Sinnet only buy the Beijing equipments to make them a national assets for the regulation compliance. AWS China to open another region very soon in Ningxia, which not included in the deal.
- PakG1 9y agoSomeone I know contacted their Amazon contacts about this. This is exactly what's happening. It's exactly like how 24vianet operates Office 365 on behalf of Microsoft inside China.
- sk5t 9y agoIt 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.
- jaxondu 9y agoAWS China announced yesterday Lambda and API Gateway are available: https://www.amazonaws.cn/en/new/2017/ https://www.amazonaws.cn/en/new/2017/. Interestingly these news are not published in the AWS dot com whats new page but they did tweet about it.
- wonderous 9y agoNon-paywalled version: http://m.nasdaq.com/article/amazon-to-sell-china-cloud-services-unit-in-300-mln-deal-20171113-01544 http://m.nasdaq.com/article/amazon-to-sell-china-cloud-servi...
- deleted 9y ago[deleted]
- tacman 9y agoMost 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.
- hooluupog 9y agoWhat 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).
- tristanj 9y ago>Beijing Sinnet is just a shell company of amazon china No. Look at their website http://en.sinnet.com.cn/home/default/index.html http://en.sinnet.com.cn/home/default/index.html 北京光环 was founded in 1999 and run their own ISP and CDN. They are clearly not a 'just a shell company' and are a local partner.
- sudhirj 9y agoLooks 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.
- unkoman 9y agoThese services are not available in the China region.
- gkanai 9y ago"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." https://techcrunch.com/2017/11/13/aws-exits-china/ https://techcrunch.com/2017/11/13/aws-exits-china/
- vfulco 9y agoThe longer the press release and/or the more legalese, the worse the story or in this case, withdrawal from a previous market. Positive, constructive press releases are very short by comparison.
- NicoJuicy 9y agoAWS continues to own the intellectual property for AWS Services worldwide Mmmm, does China care about who owns the intellectual property? That's a first
- sandGorgon 9y agohttps://twitter.com/Werner/status/930404501810438144 https://twitter.com/Werner/status/930404501810438144 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