Alibaba expands cloud services with online SAP software

Tie-up with German software giant marks Alibaba’s most ambitious product launch involving an overseas tech firm

PUBLISHED : Wednesday, 24 August, 2016, 7:57pm
UPDATED : Wednesday, 24 August, 2016, 8:07pm

Alibaba Cloud (AliCloud), a subsidiary of e-commerce powerhouse Alibaba Group, is set to introduce three major online enterprise applications from German software giant SAP by the end of this year, marking its most ambitious product launch to date with a foreign information technology supplier.

SAP, the world’s largest supplier of business management software, announced the development at an event in Beijing on Wednesday, weeks after AliCloud unveiled a plan to help more overseas technology companies enter the mainland through its new “AliLaunch” initiative.

“Cloud computing has become the new infrastructure for businesses around the world,” said Simon Hu Xiaoming, president of AliCloud.

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.

The collaboration between Hangzhou-based AliCloud and SAP will bring products with highly reliable capabilities to companies in different industries, Hu added.

Cloud computing has become the new infrastructure for businesses around the world
Simon Hu Xiaoming, president of AliCloud

According to AliCloud, the AliLaunch programme will become a “Tmall for the cloud computing industry” with up to 50 technology partners over the next 12 months. runs the mainland’s biggest business-to-consumer online retail platform. It is another subsidiary of New York-listed Alibaba, which owns the South China Morning Post.

Mark Gibbs, president at SAP Greater China, said the AliCloud tie-up will initially deliver three cloud-based solutions to the mainland.

Those include SAP Hybris Cloud for Customer, an online customer relationship management system; SAP Hana Cloud Platform, used for creating mobile-ready business applications; and SAP Business ByDesign, which is for medium-sized enterprises to automate their operations.

Gibbs said those are expected to “further expand SAP’s cloud footprint in China, and meet the needs of more Chinese enterprises”.

SAP, which started selling its software in China 21 years ago, operates out of 10 cities in the Greater China market where it has more than 5,700 employees and about 11,000 corporate customers.

Gartner analyst Vincent Fu said the AliCloud initiative with SAP and other foreign cloud technology suppliers are poised to gain traction over the next 24 months. “The cloud adoption curve for enterprises is getting more mainstream,” Fu said.

AliCloud is the mainland’s largest cloud infrastructure services provider, with 577,000 paying customers as of June 30.

It was founded in 2009 to operate the network that powers parent Alibaba’s online and mobile e-commerce businesses, and supports the merchants on those platforms.

Edward Chen, the chief business officer at SAP Greater China, told the Post on Wednesday that SAP will launch a separate set of cloud solutions on the mainland by the end of this year through Guangzhou-based online services provider China DataCom Corp.

SAP Ariba’s range of cloud-based applications helps companies automate their supply chain, managing everything from contracts to payments all in one system.

More than two million companies – including about 500,000 in Asia – use SAP Ariba at present, according to SAP.

The enterprise public cloud services market in mainland China is poised for rapid growth in the next few years, driven by strong demand from small businesses, according to Forrester Research.

It predicts the market to reach US$3.8 billion by 2020, more than double the estimated US$1.8 billion last year.