Alibaba hooks up with Accenture, SAP in expansion push in China and Southeast Asia; takes aim in dominating global cloud business

PUBLISHED : Friday, 22 April, 2016, 12:29am
UPDATED : Friday, 22 April, 2016, 1:10am

Alibaba Cloud, China’s largest computing services provider, is looking to accelerate its expansion in China and Southeast Asia on the back of newly formed alliances with global consulting firm Accenture and software giant SAP China.

“Accenture is a well-respected consulting firm in the industry, especially for computing enterprises,” said Ethan Yu, vice president of Alibaba Cloud told reporters. “Together with Alibaba’s strengths in big data, we can combine machine learning and artificial intelligence [into cloud computing] and work together to better serve clients.”

Yu Yi, managing director of Accenture in Greater China, called the collaboration a “milestone” for both companies.

Alibaba Cloud set up its headquarters for its international business in Singapore last year, and also opened its first data centre outside of China in the country as it competes with Amazon and Microsoft for a slice of the Southeast Asian market.

Research firm Gartner forecasts that Southeast Asia’s IT spending, which includes cloud services, will hit US$62 billion by 2018, with much of it driven by Singapore, Malaysia, Indonesia and Thailand.

According to Alibaba’s Yu, Accenture is well-positioned to help Alibaba Cloud tackle Southeast Asia.

“Accenture has good solutions for the market in Southeast Asia, as well as a large [consultancy] team and local customer bases,” he said.

Cathy Huang, research manager at IDC, said that while Alibaba Cloud still has some way to go before joining Amazon or Microsoft at the top of the industry, the company is on the right track.

“Alibaba Cloud has made a lot of progress and are picking the right partners,” said Huang.

“Accenture is a leading vendor in consulting and system integration services, and an important player in assisting companies in their digital transformation journeys,” she said, adding that Accenture was well-suited to help expand Alibaba Cloud’s footprint in Southeast Asia.

Alibaba Cloud’s collaboration with SAP China will also see both companies integrating their resources on the Alibaba Cloud platform, so that Chinese businesses can take advantage of the company’s one-stop-shop cloud computing platform as well as SAP’s database and software-as-a-service offerings.

China’s public cloud market is primed for quick growth, with research firm Forrester forecasting that it will hit US$3.8 billion by 2020, up from US$1.8 billion in 2015.

Alibaba Cloud hopes to beat current leader Amazon by 2018 in the global market, and Alibaba Group said in July that it would pump in US$1 billion into the cloud subsidiary to help accelerate its growth outside of China

“The partnership with SAP China also shows that Alibaba is looking to target the big enterprise segment [in the country],” said Huang.

“A partnership with SAP China and Accenture is a logical continued step for Alibaba Cloud [in their local and international expansion plans].”

While Alibaba Cloud is the biggest cloud computing provider in China, it is currently ranked fifth in the global cloud computing industry, according to research firm IDC.

But Microsoft and Amazon trail Alibaba Cloud in terms of Chinese market share, coming in at fourth and fifth, while local players China Telecom and China United Network Communications Group have the second and third largest market share respectively according to IDC’s data.

Alibaba Cloud hopes to beat current leader Amazon by 2018 in the global market, and Alibaba Group said in July that it would pump in US$1 billion into the cloud subsidiary to help accelerate its growth outside of China.

One of Alibaba Cloud’s advantages, according to Yu, is its ability to provide an integrated solution for companies globally.

“Alibaba Cloud can offer a client who wants to expand global coverage a single login to manage all of its cloud and IT resources, [be it] in Shanghai or the US, instead of having multiple logins,” Yu said.

Alibaba Cloud’s chief cloud architect Derek Wang said that the company will continue to innovate to stay competitive, and has plans to incorporate more artificial intelligence technology to help handle the huge amounts of data in its cloud platform.

“Alibaba is a company that works with big data, if you look at our finance or e-commerce businesses, we rely on data analysis to create value and help our clients to succeed,” said Wang. “We will invest a lot of resources in artificial intelligence and big data, to fulfil the needs of our clients.”

In January, Alibaba Cloud collaborated with NVIDIA to create a GPU-based cloud computing platform. It also has partnerships with Indian payment startup Paytm and Intel, among others.

Alibaba Cloud reported a 126 per cent increase in revenue compared to the previous year, raking in RMB 819 million (US$126 million), according to Alibaba’s fourth-quarter earnings report.

Alibaba Group is the owner of the South China Morning Post.