Tencent Holdings, best known for its popular WeChat messaging app and online game offerings, has partnered with IBM to develop cloud-based software for corporate customers, with a focus on the healthcare and smart city industries.

One of Chinas premier companies in the consumer internet industry, Tencent is looking to diversify as Chinas businesses rapidly modernise their IT operations and seek more and more enterprise solutions.

The deal positions Tencent as a potential rival to Alibaba, which has worked with a number of Chinese data-centre providers with the aim of providing small- and medium-sized businesses with cloud-based services.

The two companies have signed a preliminary agreement to develop cloud-based Software-as-a-Service offerings such as management tools and analytics. These will be provided to sectors including banking, retail, healthcare and smart city developers by Tencent, run from their data centres.

“The industry dimension makes this especially appealing for businesses,” said Nancy Thomas, managing partner with IBMs Business Consulting Services in China. “IBM and Tencents shared vision is not only to bring the scale and cost benefits of cloud computing to enterprises in China, but to add differentiating value by serving the particular needs of specific industries. That is the key to unlocking the transformative power of cloud computing.”