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Two 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

Two 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 ago
AWS did $4.58 billion this latest quarter. They're tracking to a $20+ billion annualized run-rate.
- samspenc 9y ago
  Thanks 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 ago
    They 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 ago
Number 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.
- gumby 9y ago
  > 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. Or: China will build local champions who can grow inside a protected region and then, once they have their playbook down and anfat balance sheet, they can go out and buy market share in other regions.
  - seanmcdirmid 9y ago
    Without having to deal with international competition, it’s doubtful the local champions can do much outside of the mainland. It’s like how wechat is the biggest thing inside china, but also missing everywhere abroad outside of the Chinese tourist sector.
    - nolok 9y ago
      Then again, Huwai may only be the tip of the iceberg.
- jorblumesea 9y ago
  I mean, the game they play is really hard to fight against. It usually goes something like this: * Attract western businesses to make investments based on various capital incentives. You are a free market, after all. * Once they are established and comfortable, start imposing restrictions, stealing IP and undercutting foreign companies. Make life increasingly difficult, except for those companies which you really need to stay in the country (Apple etc). * Eventually drive out foreign business because some domestic company has stolen the tech, gotten the market share and is willing to play back with the govt Why play that game? You can't win. Why anyone invests anything other than manufacturing in China is beyond me. If your entire product can be stolen via a USB drive (source code, proprietary manufacturing processes, IP in general) stay far, far away from Chinese businesses or China. They are playing to win in a very serious way.
  - 9y ago
forapurpose 9y ago
> It sold for $300 million. That means its run-rate was probably ... Perhaps the price was based, to a degree, not on financials but on politics. Someone I know told me the story of working for a major international telco in South America, when the host country decided to nationalize their local phone service. The nation's government provided a check for $1 million (IIRC), far below the value of the business, but of course the company took the check without argument. I have no idea what happened with AWS in China. When corrupt politics intersects with business, it perverts the market and rule of law - something those doing business in the U.S. should keep in mind too.
rasz 9y ago
Amazon didnt decide anything, you simply CAN NOT do business in china(in selected sectors) without majority domestic ownership. Unlike west globalization trends, China actually cares about its own interests first, not the interests of mega corp owners.
- taobility 9y ago
  The government is responsible for all the citizens, but mega corp only responsible for its owner, isn't it?
cptskippy 9y ago
Interesting speculation however if you had bothered to read the article you would realize it's completely false.
nucleardog 9y ago
The only thing I take away from this is business as usual in China... This sort of sale/partnership occurs all the time with automakers since they're either not allowed to do business or subject to insane taxes and tariffs if they aren't majority Chinese. For instance, Volkswagen in China is 50% owned by Shanghai Automotive Industry Corporation - a Chinese company. I don't see any reason to run around and proclaim doom and gloom and the end of AWS as we know it or anything.

adventured 9y ago

AWS did $4.58 billion this latest quarter. They're tracking to a $20+ billion annualized run-rate.

samspenc 9y ago
Thanks 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 ago
  They 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 ago

Number 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.

gumby 9y ago
> 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. Or: China will build local champions who can grow inside a protected region and then, once they have their playbook down and anfat balance sheet, they can go out and buy market share in other regions.
- seanmcdirmid 9y ago
  Without having to deal with international competition, it’s doubtful the local champions can do much outside of the mainland. It’s like how wechat is the biggest thing inside china, but also missing everywhere abroad outside of the Chinese tourist sector.
  - nolok 9y ago
    Then again, Huwai may only be the tip of the iceberg.
jorblumesea 9y ago
I mean, the game they play is really hard to fight against. It usually goes something like this: * Attract western businesses to make investments based on various capital incentives. You are a free market, after all. * Once they are established and comfortable, start imposing restrictions, stealing IP and undercutting foreign companies. Make life increasingly difficult, except for those companies which you really need to stay in the country (Apple etc). * Eventually drive out foreign business because some domestic company has stolen the tech, gotten the market share and is willing to play back with the govt Why play that game? You can't win. Why anyone invests anything other than manufacturing in China is beyond me. If your entire product can be stolen via a USB drive (source code, proprietary manufacturing processes, IP in general) stay far, far away from Chinese businesses or China. They are playing to win in a very serious way.
- 9y ago

forapurpose 9y ago

> It sold for $300 million. That means its run-rate was probably ... Perhaps the price was based, to a degree, not on financials but on politics. Someone I know told me the story of working for a major international telco in South America, when the host country decided to nationalize their local phone service. The nation's government provided a check for $1 million (IIRC), far below the value of the business, but of course the company took the check without argument. I have no idea what happened with AWS in China. When corrupt politics intersects with business, it perverts the market and rule of law - something those doing business in the U.S. should keep in mind too.

rasz 9y ago

Amazon didnt decide anything, you simply CAN NOT do business in china(in selected sectors) without majority domestic ownership. Unlike west globalization trends, China actually cares about its own interests first, not the interests of mega corp owners.

taobility 9y ago
The government is responsible for all the citizens, but mega corp only responsible for its owner, isn't it?

cptskippy 9y ago

Interesting speculation however if you had bothered to read the article you would realize it's completely false.

nucleardog 9y ago

The only thing I take away from this is business as usual in China... This sort of sale/partnership occurs all the time with automakers since they're either not allowed to do business or subject to insane taxes and tariffs if they aren't majority Chinese. For instance, Volkswagen in China is 50% owned by Shanghai Automotive Industry Corporation - a Chinese company. I don't see any reason to run around and proclaim doom and gloom and the end of AWS as we know it or anything.