Chinese Cloud Provider Aliyun Enters Middle East Partnership

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Aliyun, the cloud computing division of Chinese ecommerce powerhouse Alibaba, is pursuing a joint venture with Dubai-based holding company Meraas to deliver system integration services in the region.

The joint venture will provide application development, service-oriented architecture, testing, validation, citizenship e-services and big data operations with a special focus on analytics, revenue-generation and payment solutions.

Aside from the technology venture, Meraas will also develop a “technology-oriented master-planned integrated community” that includes a Tier 3 data center facility that will be used to deliver services. The facility will also include hospitality, residential and commercial spaces, retail and restaurants, and be positioned at part of part of Dubai’s “Smart City” plan aimed at attracting ICT, media, finance and R&D companies to Dubai.

Public cloud services in the Middle East and North Africa region are expected to grow 17.1 percent this year, reaching $851 million in 2015, according to a recent report by Gartner. Software-as-a-service is the largest segment of the cloud services market in MENA, and is expected to grow 25 percent in 2015 to a total of $205.7 million. In the UAE alone, IDC anticipates managed and data center services markets to grow nearly 20 percent per year on average between 2013 and 2018, reaching $971.8 million by 2018.

It’s also interesting to note that Aliyun opened its first overseas overseas data center in March, with the launch of its Silicon Valley facility. While initially aimed at Chinese enterprises based in the US, the move signals a clear move to serve clients more globally. The Meraas deal marks its first steps into the MENA region, but could be among many international expansions.

With 23 percent of the Chinese cloud computing market, Aliyun is China’s largest cloud computing platform, and it has been expanding its capabilities with recent acquisitions including buying Dropbox-like cloud storage service known as “Kanbox” in September.

The similarities between Alibaba and Amazon are striking, and Aliyun has become widely known in China, much like Amazon Web Services in the Americas and Europe. Until recently, MENA has largely been ignored by major cloud providers, and could be a viable market for Aliyun’s international expansion.

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