Tencent Cloud secures a major overseas deal

GoTo CEO Patrick Walujo

Author | Huang Yu

Editor | Zhou Zhiyu

The landscape of global cloud computing is quietly changing.

As Indonesia's largest internet technology giant, GoTo's growth was once constrained by its outdated IT infrastructure. Against this backdrop, GoTo launched a long and rigorous global tender, ultimately deciding to migrate its instant transportation and delivery business Gojek to Tencent Cloud, and its financial business GoTo Financial to Alibaba Cloud.

This cloud migration project by GoTo is the largest cloud migration practice in Southeast Asia to date, and selecting a vendor is a significant undertaking. GoTo CEO Patrick Walujo told Wall Street Insight that GoTo invited all top global cloud service providers to bid, including its existing cloud service providers Google Cloud and Amazon AWS.

GoTo's final choice was a comprehensive consideration. In addition to Tencent Cloud's advantages in cost-effectiveness, infrastructure capabilities, and technical solutions, a key factor was the sincerity and commitment it demonstrated. The biggest difference from other vendors was that this project received the attention and support of Tencent's top management, who personally committed to making it a "top priority project" for Tencent Cloud.

Its success represents a major strategic breakthrough for Tencent Cloud in overseas markets, marking that Chinese cloud vendors now possess the technical strength and service capabilities to compete head-on with traditional market leaders on the global stage.

This also sends a clear signal: following "Made in China," "Chinese technology" is beginning to reshape the global digital infrastructure landscape in a more core and fundamental way. A new global cloud industry pattern, characterized by participation from "new forces" and more diverse competition, has arrived.

Southeast Asia's Largest Cloud Migration Practice

GoTo's cloud migration plan is a sensational event in the entire Southeast Asian business circle, as no other company in Southeast Asia has completed such a large-scale and complex cloud migration in such a short time.

GoTo plays a crucial role in Indonesia and Southeast Asia's digital economy, formed by the merger of Indonesia's largest transportation platform Gojek and the largest shopping platform Tokopedia in May 2021, covering three major fields: transportation, e-commerce, and finance, creating a "super app ecosystem" across Southeast Asia.

Currently, GoTo's services penetrate over 270 million people in Indonesia, serving nearly two-thirds of the country's household consumption.

With rapid business growth, GoTo also requires a larger IT infrastructure resource. However, the cost of building infrastructure from scratch is extremely high, and GoTo's period of business expansion coincided with a very mature stage of the cloud service market, making the use of ready-made cloud services the optimal choice for rapid scaling.

As GoTo's predecessor, Gojek and Tokopedia have collaborated with Google Cloud for many years, starting their partnerships in 2016 and 2018, respectively After the establishment of GoTo, the IT system faced integration challenges, and GoTo began using a multi-cloud architecture across different business lines.

During rapid expansion, Gojek also found that the underlying architecture built in the past was no longer sufficient, leading to issues such as increased user latency and high operational costs and risks associated with cloud architecture.

Patrick Walujo told Wall Street News: "During Gojek's development, we gradually realized that the overall architecture had accumulated layer upon layer, and we had to face this issue and tackle it head-on. About a year ago, we started discussions in this regard."

It is worth mentioning that Tencent Cloud, which was actively expanding its overseas local clients at the time, was the first to initiate this discussion.

"They approached us proactively, introducing the potential benefits of migrating to Tencent Cloud." Patrick Walujo pointed out that the main motivation for firmly initiating this cloud migration was to reduce costs, but as the company delved deeper into the migration project, it also found that certain parts of the system were overly complex.

"So we realized that we needed to make system-level architectural adjustments so that GoTo could grow more rapidly and build more advanced technologies on top of the infrastructure."

GoTo places great emphasis on the fairness of the cloud migration project bidding. After deciding to advance the cloud migration project, GoTo invited almost all mainstream cloud vendors internationally to participate in the bidding.

Patrick Walujo specifically clarified: "We did not directly engage in bilateral discussions to decide that Gojek would use Tencent Cloud and GoTo Financial would use Alibaba Cloud; rather, we went through a long evaluation and bidding process. During this process, our engineers also thoroughly studied the risks and potential benefits of the cloud migration."

Of course, before choosing to cooperate with Tencent Cloud and Alibaba Cloud, GoTo had some concerns.

Patrick Walujo stated that the main worry was whether they could truly achieve better service quality after migrating to a new cloud service provider.

Regarding the reason for ultimately choosing Tencent Cloud, Patrick Walujo pointed out: "The Tencent Cloud team demonstrated to us their capability to work with us to tackle the complexities of Gojek's business migration, which convinced us. It should be noted that Gojek's system complexity is the highest."

William Xiong, CTO of GoTo Group, also told Wall Street News that the final decision to select Tencent Cloud was based on a comprehensive assessment, including cost-effectiveness, the capabilities of the cloud infrastructure, and the matching of services.

Having strong capabilities alone is not enough; Tencent also made GoTo feel sufficiently valued. Patrick Walujo revealed that the biggest difference between collaborating with Tencent Cloud and other vendors was that this project received the highest level of attention and support from Tencent's top management, who personally promised that this cloud migration project was Tencent Cloud's top priority.

Clearly, the attention and commitment from Tencent's senior management were also very important factors in facilitating this cooperation.

Rocket-like Migration

With Tencent's multifaceted efforts, on September 20, 2024, Tencent Cloud and GoTo officially reached a cooperation agreement and simultaneously launched the cloud migration plan However, facing such a large business scale of GoTo and the complex system of Gojek, this cloud migration is a significant challenge for both GoTo and Tencent Cloud.

To better accomplish this cloud migration, GoTo specifically recruited William Xiong to lead the effort. He was previously the vice president of a leading cloud provider in China and has led multiple overseas project collaborations.

Tencent Cloud has also increased its investment in cloud infrastructure construction in Indonesia. The Tencent Cloud Jakarta region has expanded from the original two availability zones to the current three availability zones, and the third data center (IDC) in Indonesia has officially been put into operation.

At the same time, Tencent Cloud has expanded the support strength of its local team in Indonesia and has sent a technical team from Tencent Cloud headquarters to support in Indonesia.

William Xiong pointed out that GoTo Financial has done a good job with modularization, allowing users to migrate with zero perception of the distance between the original cloud and the current cloud. The challenge for Gojek is that the original data center and big data are overseas and need to be migrated to Jakarta, which involves very high physical latency and requires very detailed execution.

To minimize the impact on users, the GoTo team needs to make detailed plans to keep the entire process and execution within a very effective range.

William Xiong likened the complexity and execution precision of the entire process to a rocket launch.

He revealed that the entire process is very complex, like a rocket launch, where every step is meticulously executed by the GoTo team, and Tencent Cloud provided significant support.

Specifically, this migration involves over a thousand microservices from Gojek, and the complexity of the business and links makes the cutover extremely challenging.

The Gojek and Tencent Cloud teams closely collaborated, and after 8 months of professional research and plan preparation, with thorough preparation, testing, and drills, relying on over 50 products from Tencent Cloud such as CVM, CBS, WAF, TKE, and ES, the cutover was completed in 4 hours and 54 minutes, one hour ahead of the original plan, achieving a smooth migration.

Wall Street Insights learned that this migration also utilized advanced hot migration technology, enabling seamless server migration between Tencent Cloud data centers. It possesses powerful database tool capabilities, supports over 10 types of databases, and features efficient data replication, disaster recovery, and rollback functions, ensuring resilience and continuity during large-scale system cutovers.

Through this cloud migration, GoTo has dual objectives: first, to reduce initial operating costs; second, to optimize the technical architecture and improve long-term development efficiency.

Based on this, GoTo can build new technologies and services more quickly and achieve faster deployments.

William Xiong noted that after collaborating with Tencent Cloud, he hopes to upgrade the entire infrastructure. The GoTo team will continue to optimize to reach a very high standard before expanding to other countries and regions. "This is one of the original intentions of our cloud migration."

At the same time, William Xiong also stated that migration is a process, not just moving a system from one cloud to another; there is still a lot of optimization work to be done afterward. This is a goal for GoTo's medium to long-term continued cooperation with Tencent Cloud, aiming for a cost reduction target of over 50% Significance of Strategic Breakthrough

For Tencent Cloud, the collaboration with GoTo is of strategic breakthrough significance.

This marks Tencent Cloud's first acquisition of core local technology giant's backbone system services in Southeast Asia, undoubtedly enhancing its market influence in the region significantly.

Since 2016, Tencent Cloud has been focusing on overseas markets, serving Chinese outbound enterprises, foreign companies entering China, and local overseas clients. In recent years, going overseas has become one of the most important strategies for Tencent Cloud and the entire Tencent Group.

Against this backdrop, Tencent Cloud has accelerated the construction of overseas infrastructure. To date, Tencent Cloud has built cloud infrastructure covering 21 regions across five continents, operating 56 availability zones, with over 3,200 global acceleration nodes, and its business spans more than 30 fields including finance, general internet, media, gaming, and e-commerce.

This year, Tencent Cloud will continue to increase its overseas investment, planning to invest $150 million in the Middle East, establishing its first data center in Saudi Arabia, which will be operational within the year; at the same time, Tencent Yuan also announced the construction of a new availability zone in Osaka, Japan, which will be Tencent Cloud's third data center in Japan following the two availability zones in Tokyo.

With the strengthening of overseas infrastructure capabilities, in addition to serving Chinese enterprises going abroad, Tencent Cloud has also made further breakthroughs in expanding overseas clients in recent years.

It can be seen that, in addition to GoTo, Tencent Cloud has also reached cooperation with more local overseas clients.

For instance, in April this year, Tabelog, a well-known restaurant search and reservation platform in Japan operated by Kakaku.com Inc., reached a strategic cooperation with Tencent Cloud, officially launching the "Tabelog Japan Gourmet Restaurant Reservation" WeChat mini-program specifically designed for Chinese tourists.

In addition, Tencent Cloud also provides services for Bank Indonesia, the Abu Dhabi government, Thailand's Charoen Pokphand Group, French telecom operator Orange, and UAE telecom e&, among others. Most of these collaborations have been established in the past one or two years.

According to Wall Street Journal, Tencent Cloud is increasingly serving local clients in regions such as Southeast Asia, the Middle East, South America, and Latin America.

In the past three years, Tencent Cloud's international business has maintained double-digit growth and is becoming a new growth engine for Tencent. To date, Tencent Cloud's overseas clients have exceeded 10,000, covering more than 80 countries and regions, with over 11,000 global partners.

It is reported that in terms of localized services overseas, Tencent Cloud's revenue in the Asia-Pacific region is expected to grow by over 50% year-on-year in 2024.

Jimmy Chen, Vice President of Tencent Cloud International, told Wall Street Journal that the success of the GoTo cloud migration project is a milestone that can attract more attention to Tencent Cloud and will positively promote Tencent Cloud's future expansion in the entire overseas market.

Chinese Cloud Accelerates Going Abroad

In the wave of Chinese enterprises going abroad, accelerating overseas expansion has become a consensus among Chinese cloud service providers.

In addition to Tencent Cloud, Alibaba Cloud, Huawei Cloud, and others have also made going abroad an important strategy for their current development.

For example, at the end of last year, Yuan Qian, President of Alibaba Cloud Intelligence International, revealed that in the next three years, Alibaba Cloud will invest in building new data centers in five countries worldwide, located in South Korea, Malaysia, the Philippines, Thailand, and Mexico, while further increasing localized services and ecosystem construction At the recent Alibaba Cloud China Enterprises Going Global Conference, Alibaba Group CEO and Alibaba Cloud Chairman and CEO Eddie Wu stated that Alibaba Cloud will make strategic investments to accelerate the creation of a global cloud computing network, speed up the internationalization of AI products, and enhance the construction of outbound consulting, technology, and service teams to pave the way for Chinese enterprises going abroad.

Currently, Alibaba Cloud operates 87 availability zones across 29 regions worldwide.

Despite increasing investments, Chinese cloud vendors still face significant competitive pressure in the international market.

The "three giants" occupy more than 60% of the global cloud market share. According to data from Synergy Research Group, in the fourth quarter of 2024, Amazon's market share in the global cloud infrastructure market reached 30%, leading Microsoft Azure's 21% and Google Cloud's 12%.

It is reported that in the next three to five years, Tencent Cloud will continue to increase its overseas presence, whether in the construction of data centers or talent recruitment.

When competing with top global cloud service providers, Tencent Cloud International Vice President Jimmy Chen pointed out that Tencent Cloud has its own advantages. In addition to global infrastructure, Tencent Cloud also offers unique products such as audio and video solutions, SuperApp solutions, and edge computing capabilities. Furthermore, Tencent Cloud understands overseas compliance requirements, holding over 400 professional certifications and more than 20 compliance qualifications.

Chinese enterprises' advantages in services and supply chains have also become a unique advantage for Chinese cloud vendors in their overseas expansion, as cloud computing itself is an asset-intensive industry.

Moreover, the wave of Chinese enterprises going global will undoubtedly serve as a booster for the overseas expansion of Chinese cloud service providers. It is well known that unlike previous rounds of Chinese enterprises going abroad, the new wave emphasizes localized construction, developing a full industry chain business from production and manufacturing to marketing in the local area, which has also created a demand for comprehensive digital transformation partners locally.

In the face of domestic cutthroat competition, going global is no longer just a "strategic choice" for cloud vendors, but a necessity for survival. Despite challenges such as geopolitical issues and localization, leading vendors are forming competitive advantages in regions like Asia-Pacific and the Middle East through infrastructure-first strategies, deep ecosystem binding, and differentiated technology output.

In the future, seizing the new opportunity of AI, Chinese cloud vendors are expected to further break the pattern of international giants and occupy a more important position in the global cloud service market.

A new global cloud industry landscape is brewing