AWS wants a bigger share of Asia following Hong Kong launch

Amazon’s cloud computing unit is making further inroads into Asia after it opened a data center in Hong Kong this week, adding to the seven existing locations where it currently operates across Asia Pacific and China.

The brand-new entry will likely give the American giant a leg up in its regional combat with Alibaba’s cloud service, which, according to a brand-new Gartner report, was the biggest cloud infrastructure provider in Asia Pacific last year. But that won’t be the case with all countries, notably China, where the cards are often stacked against foreign players.

Amazon Web Services has been operating in China for quite some moment, albeit through rough and roundabout routes. a set of cyber laws enacted by Beijing in mid-2017 required foreign companies to store data locally and outsource their hardware parts to Chinese partners. In response, AWS teamed up with two separate local providers based out of Beijing and the hinterland province of Ningxia to run its cloud service while it provides the necessary “technology, advice and expertise” to the allies. In practice, AWS’s China users are subject to terms and conditions set by its domestic partners.

With two data hubs, AWS managed to carve out a 6 percent share in China’s marketplace for public cloud as an infrastructure service in the first half of 2018, according to research company IDC. Alibaba enjoyed a significant guide with a whopping 43 percent share, exceeding the sum of second to ninth-ranked players.

One main appeal of Alibaba Cloud, as well as many other Chinese offerings, is affordability. “Whether it’s price or service, AWS is at a real disadvantage in China,” Lin Rong, who runs a website named
91Yun that reviews cloud services and runs a forum for cloud computing, told TechCrunch.

In the meantime, an increasing number of Chinese companies are looking to host their servers in neighboring countries for intercontinental deployment as they take their apps, mobile games and other internet services overseas. Hong Kong is one famous hosting destination for export businesses, but even on the opposite end of the border, Alibaba has been a prime preference for many Chinese enterprises.

Just like on the continent, Alibaba Cloud’s Hong Kong service is cheaper than its intercontinental rivals; it also delivers lower latency to continent users than aws, Lin observes, thanks to its tie-ups with China’s top three network providers.

At the very least, AWS’s foray into Hong Kong will heighten tournament among cloud services targeting locally based companies. There are few places in the world where tournament in cloud is as fierce, suggested Keith Yau, founder of BootDev, a cloud-based platform for running websites.

“Hong Kong now has all the large cloud companies — Azure, AWS and Alibaba Cloud — as well as Google Cloud Platform, which is very unusual for any city in the world,” he told TechCrunch.

Hong Kong as a hub for intercontinental vend and financial services, alongside the government’s recent push to attract more tech-focused companies, means a substantial require for data storing and processing energy. Amazon, being “best in tech among all cloud services,” suggested Cyrus Wong, a data boffin at Hong Kong Institute of Vocational Education, will likely prevail some share away from existing players.

“Hong Kong is globally recognized as a leading financial tech hub and one of the top places where startups build their businesses, so we’ve had many customers asking us for an aws Region in Hong Kong so they can build their businesses on the world’s leading cloud with the broadest and deepest feature set,” read a statement from Peter DeSantis, vice president of intercontinental infrastructure and customer aid for AWS.

According to the Gartner report, AWS currently ranks second to Alibaba Cloud across Asia Pacific. Its share declined 0.2 percent to 11 percent in 2018, while Alibaba Cloud added 4.7 percent to bring its slice to nearly 19.6 percent.


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