Alibaba Group Holding Ltd (NYSE: BABA) and SoftBank Corp. announced on last Friday that they will form a joint venture to launch cloud computing services in Japan.
The venture, as known as SB Cloud Corp., will be 40% owned by Alibaba and 60% owned by SoftBank. SB Cloud Corp. plans to open a new data center in Japan to reach SoftBank's customers including startups and global organizations, as the companies compete with e-commerce giant Amazon.com, Inc. (NASDAQ: AMZN) for consumers.
This isn’t the first joint venture involving the two companies. Last year, SoftBank, Alibaba and Taiwan’s Foxconn Technology Group announced the launch of a robotics joint venture. SoftBank owns 32% of Alibaba’s stake, and SoftBank founder Masayoshi Son and Alibaba Executive Chairman Jack Ma have been longtime friends.
Sicheng Yu, Vice President of Alibaba Cloud, says: “We are proud that Alibaba Cloud can leverage its cloud computing expertise in the joint venture with SoftBank. We look forward to helping more Japanese companies grow their business with our secure, scalable and innovative cloud computing services.”
Eric Gan, Representative Director, CEO of SB Cloud and Executive Vice President of SoftBank, says: “I’ve really enjoyed working with the Alibaba Cloud team on the joint venture over the past few months. During the business planning discussions, I quickly felt that we were all working very much as one team with one goal. I believe the JV team can develop the most advanced cloud platform for Japanese customers, as well as for multinational customers who want to use the resources we have available in Japan.”
During Alibaba’s latest earnings, cloud-computing revenue rose 175% to $165 million from the previous year. Alibaba said it now has 500,000 loyalty customers for cloud computing services which more than double the amount in last year.