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Tencent targets Microsoft and Amazon with growth of cloud business in Japan

A business unit of the Chinese internet giant Tencent Holdings Ltd. will expand the scope of its cloud business in Japan by the end of this year, said a senior executive on Tuesday.

By leveraging its state-of-the-art technology in the automobile and electronics fields, Tencent, which has been offering cloud services in Japan since last year, will aim to triple its revenue in 2020 from the current level, added the executive.

Cloud computing allows transmission and storage of vast amounts of information and data through the internet. Tencent has so far focused primarily on collaborating with Japanese game-related enterprises in the cloud sector.

In Japan, recognised U.S. IT firms like Inc. and Microsoft Corp. have a strong foothold in the cloud market. Tencent’s newest target is expected to heighten rivalry among them, economists say.

“In addition to the gaming sector, we will improve offerings” for such fields as video distribution and production this year, said Zhao Jiannan, Tencent Cloud’s managing director for Northeast Asia.

Although refusing to mention a specific name, Zhao said Tencent is expected to partner with a major Japanese car manufacturer later this year, adding it would provide guidance on expanding into the Chinese market to Japanese firms that use cloud computing.

Zhao said Tencent and Japanese carmakers could collaborate to promote safety technologies and “connected cars” equipped with sophisticated telecommunication systems.

He also said Tencent would contribute to the construction of next-generation factories in the electronics sector, where small flaws in the manufacturing process can be discovered using artificial intelligence.

“We want to develop together in the areas where Japan leads the world, including games, cars and medical services,” said Zhao.

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