Alibaba’s Cloud Business Expands With Hong Kong Data Center update from May 2014

Internet giant kicks off international expansion with first cloud data center outside of mainland China

2 Min Read
Alibaba’s Cloud Business Expands With Hong Kong Data Center
Alibaba headquarters in Hangshou, China. (Image: Alibaba)

AliCloud, the cloud services arm of Chinese Internet giant Alibaba Group, has launched a data center in Hong Kong, which will be its first data center outside of mainland China.

The provider, also known as Aliyun, has teamed up with Towngas, Hong Kong’s largest gas utility, to build the data center, according to a report by Alizila, an Alibaba-owned news website that covers the company and the e-commerce industry.

The news comes about one week after the company announced the launch of a data center in Beijing – its third mainland-China location. The provider, whose parent company filed documents with the U.S. Securities and Exchange Commission for an initial public offering on U.S. markets earlier this month, is planning to expand internationally, and the Hong Kong data center is the first step.

The facility will serve the Greater China region and Southeast Asia. The company is also eyeing expansion in the U.S.

Already a major competitor to U.S.-based e-commerce and cloud giants in China, Alibaba’s potential U.S. expansion would bring another big player into the North American market.

Aliyun’s other two mainland-China data centers are in Hangzhou and Qingdao. While it is expanding its physical footprint outside of China, the move is targeted primarily at Customers located in China.

According to the Alizila report, customers using compute services outside of the country were subject to regulations in the countries where the infrastructure was hosted. Using “offshore” AliCloud servers in Hong Kong would “simplify” operations for these customers, the company reportedly said, although it was not clear whether that meant AliCloud servers rented outside of China would be subject to Chinese regulations.

An Alibaba spokesperson declined to comment, saying the company was in its pre-IPO “quiet period,” in which companies are precluded from making public statements. “We are not taking interviews on this at this time as we are in a quiet period,” the spokesperson wrote in an email.

Alibaba’s is expected to be the biggest IPO on U.S. markets since Facebook’s $16 billion float in 2012. The offering is expected to yield between $15 billion and $20 billion for the company.

One of the biggest beneficiaries of the offering will be Yahoo, which owns about 23 percent of the company. Yahoo’s stake in Alibaba is the second largest after Japanese telco SoftBank’s 34 percent stake.

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