The first batch of the US$222 million investment in the 21Vianet Group, a leading carrier-neutral internet data center services provider in China, has signaled the intention of Lei Jun, founder and CEO of handset maker Xiaomi, to make major inroads into the cloud computing sector, according to the Beijing-based Caixin Online.
On Dec. 1, 21Vianet announced an investment of US$296 million to buy 69.9 million Class A and 128.8 million Class B ordinary shares in Kingsoft Corporation, Xiaomi and Temasek, a Singapore-based sovereign wealth fund.
Lei, who serves as chairperson of both Kingsoft and Xiaomi, has invested a total of US$222 million to obtain a 14% equity ownership in 21Vianet, which represents approximately 30% of the voting power.
Lei said that in the future, he will invest US$1 billion in the cloud market and gain a spot among the top five, or even the top three cloud market players, carving out a space for itself among Baidu, Alibaba and Tencent.
Kingsoft CEO Zhang Hongjiang said the decision to enter the cloud market took only 19 hours.
He said that during an August meeting to discuss the strategy for the next three years, "We decided that cloud computing is the strategy for future development in a meeting that began on 9am and lasted until 4am the next day."
Kingsoft is a new player in the field and its earlier cloud service had mainly targeted individuals, which is a market with a low threshold.
Lei said that in the future, his company will turn to business users and leave services for individual users to Xunlei, a digital content acceleration and online video services provider.
He has formulated the "All in Yun (cloud)," strategy and vowed to invest US$1 billion in the market. In October, his plan was approved by Kingsoft's board of directors.
"The US$1 billion can help Kingsoft earn admission to the cloud market. There are not many companies in China that can afford to invest US$1 billion," Lei said