Alibaba, SoftBank team up on cloud computing services venture in Japan

PUBLISHED : Friday, 13 May, 2016, 9:33pm
UPDATED : Saturday, 14 May, 2016, 5:26am

E-commerce giant Alibaba Group is extending its cloud-computing services business in Japan through a new joint venture with the telecommunications subsidiary of conglomerate SoftBank Group Corp.

The two companies announced on Friday the establishment of SB Cloud Corp, which will open a new data centre in Japan to meet the requirements of both start-ups and multinational companies in one of the world’s top markets for information technology goods and services.

The new venture will use technologies and solutions from Alibaba Cloud, the fast-growing cloud computing arm of New York-listed Alibaba.

These offerings include data storage and processing services, enterprise-level middleware and cloud security services.

“We look forward to helping more Japanese companies grow their business with our secure, scalable and innovative cloud computing services,” said Ethan Yu Sicheng, the vice-president at Alibaba Cloud.

Cloud computing enables companies to buy, sell, lease or distribute online a range of software and other digital resources as an on-demand service, just like electricity from a power grid. These resources are kept and managed inside internet-linked data centres.

Alibaba Cloud posted US$3 billion yuan (HK$3.58 billion) in revenue, up 175 per cent year on year, during parent Alibaba’s fiscal year to March. The cloud subsidiary had more than 500,000 paying customers in that period.

“I believe the joint venture team can develop the most advanced cloud platform for Japanese customers, as well as for multinational customers who want to use the resources we have available in Japan,” said Eric Gan, an executive vice-president at SoftBank and the recently appointed chief executive of SB Cloud.

Total business and government expenditure on technology, including telecommunications services, in Japan is forecast to reach US$203 billion this year, according to data from Forrester Research.

It said Japan will rank as the world’s third-largest market for information technology goods and services this year, behind the United States’ US$1.13 trillion market and China’s US$224 billion market.

SoftBank Group is a major shareholder of Alibaba. The South China Morning Post is owned by Alibaba.