US-China trade tensions fuel misconceptions about role of Chinese tech firms, says Alibaba Cloud executive
- Alibaba Cloud, which started operations in Europe in 2016, was the world’s fourth-biggest cloud services provider last year
Alibaba Cloud, the cloud computing subsidiary of e-commerce giant Alibaba Group Holding, warns that a lingering misconception of how Chinese technology providers operate – in light of the recent travails of Huawei Technologies – could become a barrier to doing business in Europe and other international markets.
“We’ve seen how some companies have reacted to that situation because of a lack of understanding of how Chinese tech companies operate,” Wang Yeming, the general manager of Alibaba Cloud for Europe, the Middle East and Africa, said in an interview on the sidelines of MWC Barcelona, the biggest trade show for the mobile industry, which concluded on Thursday.
Chinese tech providers have the same commitment to innovation, efficiency and security as hi-tech firms from the West, according to Wang.
“In general, we need some time to let people understand the role that Chinese tech companies play. We need time for mutual understanding,” he said.
Wang’s statement comes amid efforts by Huawei, the world’s largest telecommunications equipment supplier, to change how the company is perceived by businesses in Europe, one of its largest regional markets, as the US government puts pressure on its economic allies on the continent to block the deployment of Huawei’s 5G gear by telecoms network operators because of cybersecurity concerns.
In Europe, Poland and the Czech Republic have sided with US calls to exclude Huawei’s 5G products from telecoms networks. The governments of Germany and the UK, meanwhile, are reportedly keen to remain in business with Huawei.
For Alibaba Cloud, Wang said engaging businesses across Europe in a steady dialogue provides an opportunity to further educate the market, where rival cloud services providers Amazon Web Services (AWS) and Microsoft are already well-entrenched, about the Hangzhou-based company’s commitment to security, as well as to introduce its advanced products and services.
“We already protect more than 40 per cent of Chinese websites,” Wang said.
Founded in 2009, Alibaba Cloud is the biggest provider of public cloud computing services in mainland China, with revenue of 1.3 billion yuan (US$193 million) in the quarter to December. It runs the underlying technologies behind Alibaba’s Tmall and Taobao Marketplace retail operations, Alipay’s mobile payment system under Ant Financial Services and logistics data platform Cainiao Network. New York-listed Alibaba is the parent company of the South China Morning Post.
Alibaba Cloud, which started operations in Europe in 2016, was the world’s fourth-biggest cloud provider last year, according to research firm Canalys. It estimated that Alibaba Cloud had a 4 per cent global market share, behind AWS’ 31.7 per cent share, Microsoft’s Azure business with 16.8 per cent and Google Cloud’s 8.5 per cent.
In Europe, the Middle East and Africa, Alibaba Cloud works in tandem with specialist telecoms and enterprise provider Whale Cloud, which Alibaba acquired from ZTE Corp last year.
Next-generation 5G networks – which offer faster data rates, reduced latency, energy savings, cost reductions, higher system capacity and massive device connectivity – will help companies in those sectors process more big data with IoT devices and make better decisions with use of AI, according to Wang.
Julian Gorman, head of Asia-Pacific operations of telecoms trade body the GSM Association, said cloud services providers have a role to play in helping companies make use of upcoming advanced 5G mobile infrastructure. He expects “the explosion of entrepreneurial activity over the last few years” to continue at a quicker pace as new business models are created in an environment where cloud services availability becomes ubiquitous under 5G.
Despite all the speculation about the security of Chinese hi-tech providers, Wang said Alibaba Cloud has scored some crucial wins. In November, the company forged a pact with El Corte Inglés, Europe’s largest department store by sales turnover. The two companies have agreed to develop a close cooperation in the fields of commerce and retail, cloud computing services, digital innovation and smart payments.
“Everything will go 5G in the next few years, and we want to show companies in Europe what an intelligent business should look like,” Wang said.