Looks like the discordant history Google has in China is playing negatively into its cloud ambitions. The company is finding it hard to challenge Amazon, which already has a presence in the country.
Both AWS and Microsoft Azure operate in the world’s second biggest economy, having teamed up with Beijing Sinnet Technology and 21Vianet respectively for datacenters in Beijing and Shanghai. Internet datacenters cannot be granted to foreign companies in China.
Couple this with the fact that Google has a long-standing feud with the Chinese government, and you have a situation where the cloud provider is not able to compete with AWS and Azure.
In what is a very rapidly expanding cloud infrastructure market.
In fact, earlier this year, one of Google’s marquee clients, Snap, disclosed a deal with AWS, which opened a region of datacenters in Beijing in 2014. Snap had previously cited service unavailability as a reason why it was not able to enter China previously.
Developments like these show that Alphabet, the parent company of Google, is missing out on the biggest areas of growth in technology.
The Chinese market for cloud infrastructure is set to more than quadruple by 2021 to $9.8 billion, up from $2.4 billion last year. Although other companies like Baidu and Tencent are also competing, the local market leader right now, according to Gartner, is Alibaba, the Chinese ecommerce giant
It reported its cloud revenue last week for the most recent quarter, revealing that it almost double to $359 million.
Google, then, is at a major disadvantage when it comes to serving emerging businesses that are turning to cloud for computing, storage and other needs. Its closest datacenters are in Taiwan and Singapore.
AWS, meanwhile, is opening a region in Hong Kong, and is in the process of setting up a second Chinese region in Ningxia.
And while the first half of 2017 saw the biggest growth in headcount for Alphabet in the cloud, it still remains unlikely that Google Cloud will make a big push in China anytime soon. Not without the prospects of core services like search and maps going live in the country as well.
Disconcerting decisions, all these.