Tencent Expands Its Cloud-Computing Services in US

Chinese internet giant Tencent Holdings opened its first data center in Silicon Valley this week, expanding cloud computing services into the U.S. even as American companies complain they face growing restrictions when doing the same in China.

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With Wednesday’s statement, Tencent becomes the second Chinese company to open such a center in the U.S.’s technological heartland. Alibaba Group Holding, China’s largest e-commerce company, already operates two data centers there and a third on the East Coast.

Alibaba and Tencent are boosting their cloud-computing businesses as they seek to tap the growth of Chinese companies and their demand for computing power overseas. Cloud platforms provide additional storage, computing, and networking resources to help firms grow at lower costs. Data is stored and accessed over the internet, reducing the need for on-site servers.

Tencent’s statement comes a month after a group of U.S. lawmakers wrote a letter to China’s Ambassador Cui Tiankai in Washington over China’s restrictions on cloud computing for foreign companies.

Beijing already requires overseas cloud providers to form joint ventures to operate in the country. It has proposed requiring them to turn over essentially all ownership and operations to Chinese partners, the lawmakers argued in the letter viewed by The Wall Street Journal. This could result in the transfer of valuable U.S. intellectual property, according to the letter.

“The access for foreign cloud companies in the market today is much more restrictive than it has been in the past,” said Jake Parker, the vice president for China operations at the U.S.-China Business Council, an organization that represents 200 U.S. multinational companies operating in the country.

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In November last year, China’s Ministry of Industry and Information Technology put out a draft notice of an industry regulation that would potentially shift a lot of operational control to the Chinese partner, he said. The final version has yet to be released, Beijing-based Parker said. The MIIT wasn’t immediately available for comment.

Further restrictions on access to the cloud industry would put more strain on relations between China and foreign tech companies, already terse as the world’s second-largest economy has increased censorship and demanded more control over data and operations in recent years.

China’s market for cloud infrastructure as a service (IaaS) grew 68% to $1.47 billion in 2016, according to industry researcher IDC. Microsoft Corp. and Amazon.com Inc. have to provide services in China through joint ventures with local partners, and lag Alibaba Cloud in the nation, despite strong market share elsewhere. Alibaba controls 40% of the market, while Microsoft, the biggest foreign cloud provider in the Asian nation, has 5%, IDC data shows.

Tencent, which runs WeChat, China’s largest social messaging platform with 889 million monthly active users, said it is increasing the number of data centers world-wide as demand for cloud services from the online gaming, internet finance and other web-related industries grows. The Shenzhen-based company said it would also open four other centers in Frankfurt, Moscow, Mumbai and Seoul, and has plans to expand its Silicon Valley center.

As more information and personal data is stored in the cloud, there is a heightened concern among lawmakers about the security of that data.

Chinese cloud companies will increasingly face security concerns from governments when they seek to expand further overseas, said Daniel Liu, a research analyst at Canalys in Shanghai.

Companies like Tencent and Alibaba can ease those concerns in new markets through partnerships with local firms, he said, citing a tie-up between Alibaba and SoftBank Group Corp. in Japan. “Outside of China remains a challenged market for Chinese cloud players,” he said.

Dan Strumpf contributed to this article

Write to Liza Lin at [email protected]

(END) Dow Jones Newswires

April 26, 2017 07:29 ET (11:29 GMT)

Article source: http://www.foxbusiness.com/features/2017/04/26/tencent-expands-its-cloud-computing-services-in-u-s.html

Is bigger always better when choosing a cloud provider?

These mega providers attract organisations because they represent a safe pair of hands, and so become the default choice for many companies looking to embrace cloud computing. There is a perception that it is easier to migrate workloads to a large vendor and that they’re more reliable. However, even the mega providers can’t guarantee an uninterrupted service, with Amazon suffering a significant outage as recently as February this year. Every company has different motivations behind a move to cloud, and there is no one size fits all strategy – so is bigger always better?

Big opportunities for small cloud providers

Behind the big four sits a second tier of cloud providers; these include companies such as Rackspace, Alibaba and Oracle. There are also a large number of niche cloud providers that target growth by focusing on very specific regions or industries, such as manufacturing or banking, to differentiate themselves from the competition. Smaller vendors have an opportunity to challenge mega providers by providing better, more personal levels of support to organisations. Many businesses lack sufficient in-house skills to optimise and manage their cloud environment, so this is crucial. Smaller cloud vendors also have the advantage of being able to offer bespoke services. This is especially valuable for those companies that have very specific business objectives or may need cloud only for distinct workloads, and are worried they’ll have to make compromises on flexibility and control.  

Putting a price on cloud


Whatever the size of the vendor, organisations must understand the true cost of cloud before making a final decision. This can be a major challenge for CIOs, especially becuase only 64% of cloud providers publish their prices online, according to 451 Research. While cloud services are often marketed as simple and consumable, the reality is that understanding the many costs and models of cloud can be tortuous. It’s unsurprising, therefore, that CIOs opt for the ease of a mega provider – rather than looking for hard to find prices, even though a smaller provider might represent better value for money.

To avoid this danger, CIOs must consider what they are looking to gain from cloud, and how different cloud services and vendors could benefit their organisation. Once the organisational goals have been identified, the next step is to evaluate whether the applications they seek to run in the cloud can be re-architected, or if the procurement of a new SaaS product is required. It is only after this assessment is made, that businesses should start looking at individual cloud providers to make an informed decision on what is best for the business, rather than judging purely on size.

Retaining control of cloud is key

Every company is unique; CIOs must evaluate if the cloud service they sign up to fits the needs of their business, as well as their budget. Whether they choose a mega provider, or one of their smaller competitors, it is crucial that they retain control over their cloud environment. Without the ability to manage and optimise their cloud environment, costs can quickly spiral out of control and nullify any savings the company sought to gain. Ultimately, bigger is not always better when it comes to cloud.

Article source: http://www.cloudcomputingintelligence.com/news/item/3406-is-bigger-always-better-when-choosing-a-cloud-provider

Tech giants elbow in on Amazon’s cloud computing profits

There was a common theme in some of the big tech earnings announcements this week: the cloud. Most of Amazon’s more than $700 million first-quarter profit came not from shipping books and electronics all over the globe, but from its Amazon Web Services business. Amazon was a pioneer in letting companies rent computer processing and data storage on its huge collections of internet-connected servers, but this week, Microsoft and Alphabet’s Google also reported growth in their cloud businesses. 

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Article source: https://www.marketplace.org/2017/04/28/business/tech-giants-elbow-amazon-s-cloud-computing-profits