China’s Alibaba targets data centres in bid to replace Amazon as cloud computing king by 2018
Chinese e-commerce powerhouse Alibaba Group is ramping up its investment in data centres overseas in a bid to challenge US rival Amazon in cloud computing, an area that currently only makes up a tiny fraction of the group's overall revenue.
Aliyun, Alibaba’s cloud computing unit, will establish data centres in Asian countries such as India and Japan, parts of the Middle East and Europe over the next 18 months, Aliyun president Simon Hu said on Wednesday. He did not disclose figures.
“The cloud business will be a very important sector for Alibaba,” Hu said in Beijing. “We hope to match or even surpass Amazon in three to four years.”
Amazon’s cloud business, referred to as Amazon Web Services, drew US$1.57 billion in the first quarter of 2015. This puts it on track to keep pace with analysts’ estimates of US$6 billion annual revenue.
Companies like Amazon and Aliyun help businesses process and store data on remote servers.
Boosting its cloud computing business is one of Alibaba’s key growth strategies over the next decade. The company has already attracted Rovio Entertainment, creator of the hit mobile game Angry Birds, to utilise its cloud computing services.
Aliyun collaborates with about 200 partner companies on data management and cloud computing services but hopes to grow this number to 2,000 by 2018, it said.
Hu also unveiled Aliyun’s data protection pact. He said customers could be assured of “absolute ownership” of their data, adding that Aliyun would not manipulate or transfer their cloud-based data.
The company said it analyses over 100 terabytes of information daily to check for security threats like malware.
However, it failed to address the sensitive issue of how it would respond to data requests from the Chinese government.
Alibaba’s latest quarterly earnings showed its cloud revenue stood at US$63 million, an 82 per cent increase from the same time last year.
Last month, Alibaba signed deals with seven firms so Aliyun can use their data centres to offer its cloud services abroad. Partners of the Marketplace Alliance Programme (MAP) include Intel, American data centre company Equinix and Hong Kong telecoms player PCCW.
It is also due to build a technology hub, including a data centre, in Dubai with Dubai-based real estate company Meraas Holding after the two formed a joint venture in May aimed partly at bolstering the emirate’s influence in the region.
This gives the Chinese company an edge in the region, which remains largely untapped by its American cloud computing rivals Microsoft, Google and Amazon.