May 21, 2018

Alibaba partners with Shanghai AtHub for data center deal

The alliance seeks to build five data centers for Alibaba in a bid to expand their business in the APAC region.

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Tech giant Alibaba have entered into an alliance with IT service company Shanghai AtHub to build five data centers for the former company. As per the terms of the deal, Shanghai AtHub will be paid a total of USD 633 million to construct five hyper-scale facilities to expand Alibaba’s business in the APAC (Asia-Pacific) region.

Alibaba say that business opportunities are growing in the APAC region and they intend to respond to this demand, with factors such as awareness & competition being key in driving this growth.

By building five data centers, Alibaba say that they will be able to meet the demands of businesses in the APAC region. They also say that they will reveal the locations of these data centers very soon.

Speaking about this alliance, Shanghai AtHub have claimed that they will be handling this project on behalf of Alibaba, installing and operating the data center’s infrastructure. They also say added that Shanghai AtHub are not expecting any revenue from the deal, in 2018 itself.

Explaining this in detail, a spokesperson for Shanghai AtHub, commented:

Profits will be staged during the 10-year operating period based on project delivery time and progress.

Shanghai AtHub say that they have proposed two options to Alibaba wherein Shanghai AtHub either pays for the electricity of data centers themselves or pass on the cost to Alibaba. Speaking about this, the spokesperson for Shanghai AtHub added:

As the electricity service fee settles revenue at the actual cost incurred… there is no difference in the number of business profits generated in the two service models.

Industry analysts say that this deal speaks volumes about the growing data center sector in China. It will be interesting to watch how competitors react to this expansion laid out by Alibaba.

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