Tencent plans to double number of offshore data centers this year

Dancers perform underneath the logo of Tencent at the Global Mobile Internet Conference in Beijing May 6, 2014. [Photo/Agencies]

Tencent Holdings Ltd announced on Wednesday plans to more than double the number of its offshore data centers this year, its latest push to grow its cloud business and serve both international companies as well as Chinese groups wanting to expand overseas.

With the new Silicon Valley data center inaugurated on Tuesday, the internet giant said another four are in the pipeline in Frankfurt, Mumbai, Seoul and Moscow, all of which are located in regional business or technological hubs.

The company said that the new investments will bring the count of such offshore centers to eight, adding to existing facilities in Hong Kong, Singapore and Toronto.

Tencent said cloud operations in Hong Kong and the Silicon Valley are also slated for expansion this year.

"We want to grow our overseas cloud capability to meet the rising demand from companies around the world as they look for fast, reliable, secure and cost-effective services to expand globally and migrate to the cloud era," said Rita Zeng, vice-president of Tencent's cloud computing arm.

The data centers are designed to meet companies' soaring demand for high availability and recovery, along with greater access to offerings including data storage and analytics, as more businesses tap into cloud computing to boost operational efficiency and innovation.

The gaming-to-social networking conglomerate reported in March that its cloud service revenue more than tripled year-on-year in 2016.

The new data centers form part of Tencent's broader strategy to invest in the latest technologies, such as cloud, security, big data and artificial intelligence.

According to Tencent Chairman Pony Ma, the company is increasingly banking on utilizing the might of cloud computing to help Chinese manufacturers digitalize their operations and adopt predictive analysis for better cost control.

Its rival, Alibaba Group Holding Ltd, is also making strides in cloud computing, with 14 overseas data centers in place by the end of last year. AliCloud plans to export technologies to economies along the Belt and Road Initiative, as more Chinese companies expand their deployment in the region, said Wang Yude, head of its overseas operations.

The international cloud market, however, remains largely controlled by Western players, according to Synergy Research Group. Amazon Web Services dominates 40 percent of the market, followed by a combined 23 percent shared by Microsoft Corp, Google Inc and IBM Corp, Synergy added.