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Part1 - Why Cloud Service is Important to Tencent’s Overseas Market?

By ESC Editorial Team, over 5 years ago Business
Part1 - Why Cloud Service is Important to Tencent’s Overseas Market?

Tencent Cloud service had been mentioned by Pony Ma for the first time was at the Tencent "Cloud + Future” summit, on July 5, 2016. And it has been talked for many times since that summit. According to Tencent's attention and attitude to it, we could learn that the cloud will be another important business in the Tencent's future. In this article, we can know why the cloud service is important to Tencent and its overseas market.

Pony Ma also said in public that the future of the Internet would be to deal with big data in the cloud using artificial intelligence, demonstrating his great determination to develop cloud services.


Indeed, Pony Ma recently talked about Tencent Cloud again, making it clear that Tencent's most important position was to provide cloud computing, big data, Internet of Things and other basic capabilities in the future when it comes to Tencent’s dos and don’ts in the digital transformation of Chinese enterprises, the process of digital economy.


It is obvious why Pony Ma repeatedly emphasised Tencent Cloud. The key element for “Internet +” is the cloud, which also fits the role of Tencent as a "connector", because every industry of the “Internet +” must finally reach interoperability, which requires the support of the cloud infrastructure.


Today, Tencent cloud is not only expanding fast in the Chinese market, but also rapidly in overseas markets.


Recently, Tencent Cloud has not only changed its domain name to a more internationalised, but also announced that it has officially opened its Silicon Valley Data Centre at the same time, following Hong Kong, Toronto and Singapore. Four more new overseas data centres will follow this year. In addition, the expansion of the data centres in Silicon Valley and Hong Kong will be completed.


Following the opening of Tencent Cloud's first overseas data centre in Hong Kong in July 2014, Tencent Cloud had already reached 29 service hubs worldwide within three years, taking into account that fewer than 10 existed in 2015.


So the question is, “is it very hard for us to know how well Tencent Cloud has done in overseas markets?” We received some answers after visiting Tencent Cloud's data centre in Singapore.


Singapore has gained its reputation as the Strait of Malacca on the Internet in the cloud computing industry, not only because of its strategic location in Southeast Asia, but mainly because of the convergence of underwater fibre optic cable that provides worldwide access to Singapore’s largest data exchange centre in Asia Pacific.


Founded in 1998, Equinix is the world's leading global networked data provider, with access to more than 1,400 network operators and 2,700 cloud and IT service providers. SG3 in Singapore is Equinix's largest IBX data centre in the Asia Pacific region. The 7-storey building offers 35,000 square metres of hosted hosting space. With the SG1 and SG2, it is the most densely populated data centre in Singapore.


Equinix Singapore data centre, with access to more than 190 Internet service providers, has attracted cloud computing providers including Tencent Cloud and the international giants Microsoft and Amazon.


Working with data operators like Equinix in Singapore is the key model Tencent uses to go overseas, but Tencent Cloud has its own standards in choosing a partner. For the network level, those that were accessed by most operators were selected, while reliability level required at least T3. “There are also factors that we might consider, such as whether there is a single point of failure or existing skills,” said Li Yuming, overseas senior operations manager of IDC at Tencent Cloud.


According to Li Yuming, Equnix is the partner in Singapore, Hong Kong and America West, in Germany, it is Interxion, Europe's largest data centre provider, and in Canada it is Cogeco, one of the leading digital service providers in the local market.


Tencent Cloud’s way of working in the overseas market is in sharp contrast to its rival Alibaba Cloud, which mainly establishes joint venture companies.


"Once a joint venture company is established, business processes will be very long, but direct collaboration can started quickly; Tencent Cloud will not consider setting up a joint venture, but will continue to push the current model," said Zeng Jiaxin, Tencent vice president.


Li Yuming, who often deals with foreign data providers, also said one advantages of the cooperation model is that they have more choice at the IDC level, because they can work with those who have the shortest delivery time, usually 4-10 months after the proposal from Tencent Cloud.


In fact, Tencent Cloud and Alibaba Cloud are core competitors to each other, and it’s hard to gauge whose way of overseas expansion is the wiser. The best way to adopt a joint venture company lies in the sharing of benefits and risks, but the efficiency and progress are lower. While you can always choose the best available partners at the time, it is important to find the best way of providing services and working with the partners.

Keep reading to learn why Tencent focuses its attention on Cloud Service, please click the following article: Part 2 - Why Cloud Service is Important to Tencent's Overseas Market?

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