Google with the aims of re-entering the Chinese market, is in talks with the top companies in China like Tencent Holdings Ltd. (the company which owns the popular social media site, WeChat) and Inspur Group. Its aim is to expand their cloud services in the second-largest economy. According to some people who are familiar with the ongoing discussion, the talks began in early 2018 and Google was able to narrow down to three firms in late March. But because of the US – China trade war there is an uncertainty, whether this will materialize or not.
Why is Google interested in cloud partnerships with Chinese tech giants?
In many countries, Google rents computing power and storage over the internet and sells the G Suite, which includes Gmail, Docs, Drive, Calendar, and more tools for business. These run on their data centers. It wants to collaborate with the domestic data center and server providers in China to run internet-based services as China requires the digital information to be stored in the country. This is the reason why they need to partner with the local players.
A tie-up with large Chinese tech firms, like Tencent and Inspur will also give Google powerful allies as it attempts a second innings in China after its earlier exit from the country in 2010. A cloud partnership with China will help them compete with their rivals like Amazon and Microsoft.
With Tencent by their side, it will be able to go up against the local competitors including Alibaba Group Holding Ltd.
How Google has been making inroads to China in the recent past
- In December, Google launched its AI China Center, the first such center in Asia, at the Google Developer Days event in Shanghai.
- In January Google agreed to a patent licensing deal with Tencent Holdings Ltd. This agreement came with an understanding that the two companies would team up on developing future technologies. Google could host services on Tencent’s data centers and the company could also promote its services to their customers.
- Reportedly, to expand its boundaries to China, Google has agreed upon launching a search engine which will comply with the Chinese cybersecurity regulations. A project code-named Dragonfly has been underway since spring of 2017, and accelerated after the meeting between its CEO Sundar Pichai and top Chinese government official in December 2017.
- It has launched a WeChat mini program and reportedly developing an news app for China.
- It’s building a cloud data center region in Hong Kong this year. Joining the recently launched Mumbai, Sydney, and Singapore regions, as well as Taiwan and Tokyo, this will be the sixth GCP region in Asia Pacific.
With no official announcements, we can only wait and see what happens in the future. But from the above examples, we can definitely conclude that Google is trying to expand its boundaries to China, and that too in full speed.
To know more about this recent Google’s partnership with China in detail, you can refer to the full coverage on the Bloomberg’s report.