It appears Amazon Web Services (AWS) is continuing a presence in China after all: the company has announced a strategic technology partnership with Ningxia Western Cloud Data Technology (NWCD), opening a second data centre in China in the process.
The AWS China (Ningxia) region, which offers two availability zones at launch, complements the Beijing region Amazon already has. Like the Beijing region, which is operated by Sinnet, the Ningxia region will be operated by NWCD.
This curious relationship is further expanded in this statement from the press materials. “While the cloud services offered in both AWS China regions are the same as those available in other AWS regions, the AWS China regions are isolated from all other AWS regions and operated by AWS’s Chinese partners separately from all other AWS regions,” the company notes. “Customers using the AWS China regions enter into customer agreements with Sinnet in Beijing and NWCD in Ningxia, rather than with AWS.”
The reason behind this is due to various restrictions China puts on technology companies. As a CNBC report put it, Chinese firms “usually can fully own and control data centres and cloud-related services around the world without foreign equity restrictions or technology transfer requirements, but foreign cloud companies in China don’t enjoy the same environment.” In May, the country’s new cybersecurity law took effect, putting more pressure on organisations.
As an example of the former, last month Sinnet announced in a regulatory filing it was buying part of Amazon’s cloud business in China to help “comply with China’s laws”. The news forced AWS to deny it had sold up in the Asian country.
To give an idea of the cooperation involved, the press materials included a statement from He Jian, secretary of Zhongwei Municipal Committee of the Communist Party of China. “We have developed a close collaboration with AWS based on mutual trust, and are delighted that our region is now offering highly resilient, high performance data centres to enterprises across the nation,” said He.
“The second AWS region in China is part of AWS’s ongoing commitment to offer best in class cloud technologies to Chinese customers,” added AWS CEO Andy Jassy in a statement. According to the company, customers on board with the new region include Lenovo, Samsung Electronics and Xiaomi.
In October, analyst firm Synergy Research released a note which put more meat on the bones regarding the Chinese market. “The difference between China and all other countries is striking,” said John Dinsdale, a chief analyst at Synergy, at the time. “The markets for cloud services and for data centre infrastructure are truly global in nature and in all regions they are dominated by US-headquartered companies, but China stands out as the one huge exception.
“Going forward, it is difficult to see US companies making too much headway in China, but there is no doubt that some of the Chinese companies will have an increasing impact in countries beyond China,” Dinsdale added.