Alibaba Cloud closing Australian and Indian datacenters

Prioritizing Mexico and Southeast Asia

Alibaba Cloud has revealed that it will soon close its datacenter operations in Australia and India – despite previously telling The Register its Australian operations remained intact.

Late last week the Chinese cloud champ posted news of the decision, declaring "As part of Alibaba Cloud's infrastructure strategy update, following careful assessment, we have decided to cease operations at our datacenters in Australia and India while enhancing our investment in Southeast Asia and Mexico."

The statement continues: "Alibaba Cloud has issued multiple rounds of notifications and technical migration plans to affected customers since December 2023."

That mention of December 2023 is interesting. In February 2024 The Register received a tip from a reader to the effect that Alibaba Cloud would close in Australia and layoffs had been made.

We sent Alibaba reps an email in which we explained our tipster had told us "Alibaba Cloud has dramatically downscaled its Australian operations – perhaps even closing its local presence."

The Chinese giant responded by telling us its Australian office remained open and no job cuts had been made – which in retrospect we know to have been at best an evasion. It hadn't closed or made layoffs yet - but knew the decision to shut down had been made.

We now know that Alibaba Cloud customers were told that datacenter operations would end in Australia on September 30. Indian customers were given a shorter deadline: July 15.

After those dates, data stored in the Australia (Sydney) and India (Mumbai) regions will no longer be available.

Migration to another Alibaba Cloud datacenter is the suggested alternative.

Australia is a rich but small nation (population 27 million), in which AWS, Azure, Google and OVH all have strong presences. With public sentiment down under not exactly pro-Beijing, it's not hard to see why Alibaba Cloud has decided to leave.

India, however, is the world's most populous nation and according to the International Monetary Fund is enjoying GDP growth of 6.8 percent – placing it eighth among all nations. Most tech players therefore see India as having enormous upside.

But relations between Beijing and Delhi are currently frosty. The Register can imagine few Indian buyers would consider the Chinese cloud.

Prioritizing Mexico may therefore be easier. Alibaba Cloud's recently announced plan to open its first datacenters there appears linked to the growing presence of Chinese manufacturers in the nation. Such outfits may well use Alibaba Cloud at home – where Alibaba is the public cloud market leader – and therefore be happy to tap its nascent North American presence.

Alibaba Cloud's preferred datacenter designs may also have influenced its decision – it builds at decent scale, as we learned last week in a paper describing Alibaba Cloud's datacenter sites as having capacity for 1,875 servers packing eight GPUs apiece, and 18MW of energy consumption.

The Register understands Alibaba Cloud did not reach that scale in Australia, and likely resided in a colocation facility.

Non-standard configs add cost to cloud ops. Alibaba Cloud could simply have decided Australia and India were anomalies, not worthy of its attention. ®

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