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AlibabaAlibaba and Softbank have announced the establishment of SB Cloud Corporation, a new joint venture to offer cloud computing services in Japan.

The demand for public cloud in Japan and surrounding countries has been growing in recent years, with Japan leading the way as the most advanced nation. A report from Gartner last year estimated the total public cloud services spending in the mature APJ region will rise to $11.5 billion by 2018. Alibaba has targeted the region to grow its already healthy cloud business unit.

“I’ve really enjoyed working with the Alibaba Cloud team on the joint venture over the past few months,” said Eric Gan, the new CEO of SB Cloud and EVP of SoftBank. “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.”

SB Cloud will enable Alibaba to increase its presence in the market, where it already offers services to SoftBank’s business customer base in Japan, which primarily comprises of global organizations. SB Cloud will open a new data centre in the country, where it will now serve customers outside of established SoftBank customer base, offering data storage and processing services, enterprise-level middleware as well as cloud security services.

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A recent report from the US Department of Commerce highlighted the Japanese market is one of the most competitive worldwide, though five of the six major vendors are American, Amazon Web Services, Google, IBM, Microsoft and Salesforce. Domestic companies, such as Fujitsu, have announced aggressive expansion plans. Fujitsu claims to be to investing $2 billion between 2014 and 2017 to capture an increased market share in cloud computing, primarily focused on the growing IoT sub-sector.

While Alibaba’s traditional business has been in the Chinese market, the company has been making efforts over the last 12-18 months to diversify its outreach. Last year, the company launched a new data centre in Singapore, as well as in Silicon Valley. It also launched what it claims is China’s first cloud AI platform last August, DT PAI. The purpose-built algorithms and machine learning technologies are designed to help users generate predictive intelligence insights, claiming the service features “drag and drop” capabilities that let users easily connect different services and set parameters, seemingly following IBM’s lead in designing a more accessible offering for the industry.

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