Alibaba to fast-track expansion of cloud business with key partners

Managed services providers like Datapipe help Chinese firms growing overseas and global companies entering China to move their applications online

PUBLISHED : Thursday, 20 October, 2016, 4:05pm
UPDATED : Thursday, 20 October, 2016, 11:00pm

Alibaba Cloud, e-commerce giant Alibaba Group’s cloud computing subsidiary, is looking to fire up its international expansion and narrow the gap with Amazon Web Services through closer ties with so-called managed services providers.

The Hangzhou-based company recently named Datapipe, a privately held US information technology services provider, as its first international partner tasked to help ease the cloud set-up for Chinese organisations venturing abroad and multinational firms entering mainland China.

Ethan Yu Sicheng, the general manager of Alibaba Cloud’s global operations, said the company plans to add more managed services provider partners because of the large workload involved in moving enterprise applications over to the cloud.
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 kept and managed inside data centres. “Cloud” refers to the internet as depicted in computer network diagrams.

“In this industry, we see customers relying on managed services providers to not only implement their mobile applications, but also to find the right cloud providers for them and manage their resources afterwards,” Yu said.

Scalability is one of the core benefits of moving to the cloud
Jason Singh, Datapipe’s head of marketing

He declined to say how many managed services providers Alibaba Cloud has partnered with so far.

Founded in 2009, Alibaba Cloud runs 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.

Alibaba Cloud has since become mainland China’s largest cloud infrastructure services provider, with 577,000 paying customers and revenue of 1.24 billion yuan (HK$1.43 billion) in the quarter ended June 30.

Jason Singh, Datapipe’s head of marketing in the Asia-Pacific, told the Post that the company designs, builds and manages the cloud infrastructure of enterprise customers.

“Simply put, ‘moving to the cloud’ means outsourcing your company’s servers from its premises into purpose-built data centres,” Singh said. “As your company grows, it can easily increase the level of capacity in the data centre or group of data centres, without worrying about installing and maintaining new hardware yourself. Similarly, you can easily scale down your requirements should less capacity be needed. This scalability is one of the core benefits of moving to the cloud.”

Singh pointed out that Datapipe has been helping companies move to the cloud for almost 15 years – “so it was an easy decision for Alibaba Cloud to partner with us”.

“We feel with our experience in Hong Kong and China, we have developed a rich and unique understanding of how to deploy cloud solutions in these markets, which revolve around security, compliance and scalability,” he said.

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According to Datapipe, Chinese firm Joyful Journey Travel is its first managed Alibaba Cloud client.

Joyful Journey, which provides financial services to travellers in mainland China, said its biggest concern with moving to the cloud is security for its customer data.

“We knew we wanted to move into the cloud, but we didn’t know how to develop and launch a best-practice cloud environment,” Huang Gangwei, chief executive at Joyful Journey said. “Datapipe designed a solution on Alibaba Cloud and ... we can now scale our operations effortlessly.”

Morgan Stanley has forecast Alibaba Cloud will record revenue of US$8.72 billion by 2020, closing the gap on global industry leader Amazon Web Services and becoming a key growth driver for its parent.

In a research note published in June, Morgan Stanley equity analyst Robert Lin put Alibaba Cloud’s value at about US$39 billion.

Lin said Alibaba Cloud only started making its broad product offerings commercially available in 2014, “implying ample revenue growth opportunity”.