Alibaba to help more foreign tech suppliers enter China through cloud computing initiative

PUBLISHED : Tuesday, 09 August, 2016, 9:47pm
UPDATED : Tuesday, 09 August, 2016, 10:58pm

Alibaba Cloud (AliCloud), a subsidiary of e-commerce giant Alibaba Group, is gearing up to help more overseas technology companies enter the mainland Chinese market through a new initiative called “AliLaunch”.

Yu Sicheng, the general manager of AliCloud’s global operations, said at an event in Beijing on Tuesday that the company plans to sign up to 50 technology partners over the next 12 months through the programme.

“The market demand is tremendous in terms of getting foreign companies’ highly developed applications and services delivered to Chinese consumers over the cloud,” Yu said.

But Beijing’s efforts to tighten control over internet content and implement stringent cybersecurity rules have dampened the ability of foreign cloud companies to sell their software and services online in the world’s third-largest technology market.

Cloud computing enables companies to buy, sell, lease or distribute online a range of software and other digital resources as an on-demand service, just like electricity from a power grid. These resources are managed inside data centres. “Cloud” refers to the internet as depicted in computer network diagrams.

Yu said AliLaunch will assist foreign cloud companies overcome common obstacles, such as scalability and technological compatibility, as well as help them pursue joint ventures and strategic marketing partnerships.

More importantly, “we can help them understand and comply with local security laws”, Yu said.

Founded in 2009, AliCloud operates the network that powers parent Alibaba’s online and mobile e-commerce businesses, and supports the merchants and buyers on those platforms. New York-listed Alibaba owns the South China Morning Post.

“We are aiming to build AliLaunch as the Tmall of the cloud computing industry,” said Yu, referring to Alibaba’s business-to-consumer online retail platform.

He said foreign technology companies now have an online store where businesses in China can have access to some of the most advanced cloud software and services.

The initial batch of 11 technology partners signed up by AliCloud include SAP, the world’s largest supplier of business management software; German open-source software company Suse; mapping application provider Here; and Japanese storage powerhouse Hitachi Data Systems.

Edward Chen, the chief business officer at SAP Greater China, said last month that the company targeted “increasing penetration of our cloud solutions into small and medium-sized enterprises”.

Yu pointed out that the potential revenue from AliLaunch was hard to predict, but said it was a step to building a global cloud computing ecosystem.

AliCloud, which Morgan Stanley valued at US$39 billion in June, also announced a partnership with Taiwan’s HTC Corp to develop virtual reality solutions.