Alibaba Cloud to Close Data Center Operations in Australia, India

China-based Alibaba Group Holding Ltd. (NYSE: BABA) has announced that it is halting its data center operations in Australia and India as it focuses on expanding into southeast Asia and Mexico. The e-commerce company’s cloud computing unit is poised to build new facilities in South Korea, the Philippines, Thailand, Malaysia and Mexico over the next three years as part of companywide efforts to increase infrastructure spending in different markets.

The move to shut down its data center operations in India and Australia is part of Alibaba Cloud’s “infrastructure strategy update.” According to Alibaba Cloud, the company decided to halt operations in the two markets after conducting a “careful assessment” while simultaneously working to expand its investments in Mexico and southeast Asia. Its data-center service operations in India will cease after July 15, 2024, while Alibaba Cloud’s Australian data-center services will halt after Sept. 30, 2024, the Chinese tech company said.

Alibaba Cloud added that it has already notified its Indian and Australian customers of its impending exit from both markets as the company plans to shift investment to other markets. As the data stored on the India and Australia servers will be inaccessible once the data centers in the two markets shut down, Alibaba Cloud urged its clients to move their businesses to alternative Alibaba data centers in Singapore and other nations. Alibaba’s exit from Australia may be due to dwindling public approval of Chinese investments and stiff competition from western companies such as Google, Azure and AWS.

The Australian data center was launched in 2016 and is in Sydney while the Indian data center was set up two years later in 2018 and is in Mumbai. Alibaba branched out from its core e-commerce business into the data segment with relative success, and its cloud-computing subsidiary quickly became one of the largest players in the game. Alibaba Cloud allows enterprises from around the globe to distribute their online resources over the internet and access those resources remotely. Data centers provide the computing power needed to host all these resources online, making them a critical cog in Alibaba Cloud’s business.

These centers are essentially massive warehouse-like structures that hold multitudes of computers that act as servers, hosting material on the internet and allowing businesses to access their resources at will. They are an invaluable resource to businesses that need to host materials on the internet but don’t have the resources, space or know-how to set up and run their own servers.

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