Alibaba’s cloud computing business makes first move into vast Middle East market

PUBLISHED : Wednesday, 13 May, 2015, 10:34am
UPDATED : Wednesday, 13 May, 2015, 10:34am

E-commerce titan Alibaba Group is poised to accelerate the international expansion of its information-technology services business with a new operation covering the Middle East and North Africa region.

Aliyun, the cloud computing subsidiary of Alibaba, formed a new joint venture with Meraas, a diversified holding company operating out of the United Arab Emirates, to offer technology services to businesses and government institutions.

The venture will be headquartered in Dubai and focus on software applications development, testing and validation of information technology systems, government electronic services, payment solutions and so-called "big data" projects, which involve analyses of various data formats in large volumes.

"As the world evolves, I believe the information technology era is moving towards the data technology era," Jack Ma Yun, Alibaba's lead founder and executive chairman, said in a statement after the deal was signed at the company's Xixi campus in Hangzhou.

Ma added: "Dubai’s advanced infrastructure and economic strength is a good match for our technology edge, and with Meraas we will be able to provide local entrepreneurs with the vital infrastructure that will ignite innovation and help them to succeed."

Aliyun's alliance with Meraas followed the launch in March of Alibaba's first overseas-based data centre in California's Silicon Valley.

According to Meraas, the new joint venture will build its own data centre inside a planned technology-oriented residential and business complex to be developed in Dubai. The venture will be one of the anchor tenants in this development.

Data centres are secure, temperature-controlled facilities built to house large-capacity servers and data-storage systems.

They have multiple power sources and high-bandwidth internet connections and are used to host and manage so-called cloud services, which enable companies to buy, sell, lease or distribute software and other digital resources online.

Research firm IDC has forecast information and communications technology industry spending in the Middle East and North Africa to surpass US$270 billion this year, while the managed and data centre services market segment in the UAE would be worth US$971.8 million by 2018.

Meraas group chairman Abdulla Al Habbai said the partnership with Aliyun was in line with efforts to transform Dubai into a "smart city".

"We strongly believe that the new company will alter the information technology landscape of the region," he said.

Founded in 2009, Aliyun is mainland China's largest provider of cloud services. It also operates data centres in Hangzhou, Qingdao, Beijing, Shenzhen and Hong Kong. As of June 30, about 1.4 million customers are using Aliyun services directly or indirectly through independent software vendors.