Alibaba continues unrelenting rise cloudwards

The Chinese tech dragon’s cloud division is ready to dominate a booming tech market.
20 August 2019 | 17 Shares

Alibaba Group location in Hangzhou. Source: Shutterstock

The cloud services arm of Asia’s biggest commerce giant, Alibaba Cloud is fast becoming a challenger among global leaders Amazon Web Services, Microsoft Azure and Google Cloud Platform. 

Comprising 7 percent of Alibaba’s overall sales today, Alibaba Cloud reported a US$4.5 billion annual revenue run rate in the fiscal first quarter this year. It represents a 66 percent year-on-year rise in sales— growth which, Alibaba claims, is down to a focus on security, analytics, and AI tools. 

Alibaba Cloud’s APAC dominance

Alibaba Cloud is securing most of its competitive advantage by cornering the Asia-Pacific market, and its home market of China in particular. 

Promoting itself publicly as ‘In Asia, for Asia’, the cloud services provider operates 47 availability zones across 14 cloud regions in Asia-Pacific— including in Singapore, Indonesia, Japan, Hong-Kong, Malaysia, India and Australia. 

Its dominance in the region saw it comprise 19.6 percent of the Infrastructure-as-a-Service and Infrastructure Utility Services (IUS) market, according to Garter, while rivals in AWS and Azure sat at 11 percent and 8 percent respectively. 

Becoming the ‘go-to- services for companies operating there— such as Salesforce, for example— it still has some catching up to do with the global market. That run rate trails behind Google Cloud’s US$8 billion, and those of other global competitors. 

Every business powered by cloud

Last year, Alibaba CEO Daniel Zhang laid out predictions that “every business in the future will be powered by cloud”, with the technology becoming Alibaba’s “main business” in the years to come. 

That commitment has seen Alibaba pour investment into its cloud division and expand its footprint away from Asia, with data centers now in Germany, the UK and the US. 

But according to words by Selina Yuan, President of Alibaba International, attained by ZDNet, ‘In Asia, for Asia’ means not focusing on taking on a global playing field just yet, but focusing first on locking up the rich opportunity to support cloud adoption among small and mid-sized businesses in the APAC region.

In Asia-Pacific, the cloud vendor operates across 14 cloud regions, with several outside mainland China. 

Here, Alibaba Cloud wants to become the leading cloud services provider for the world’s largest consumer market and center of innovation for new developments in e-commerce, social media and e-payments. 

In its quarterly earnings report, Alibaba reported that its cloud division launched 300 new products to bolster its products, adding: “we are focusing on delivering high value-added services while rationalizing our offerings of commodity products and services.

“We will continue to execute a strategy of expanding our market leadership, increasing investments in talent and technology infrastructure and developing new value-added products and features.”