China’s Alibaba expands operations in India with foray into cloud computing services

Alibaba Cloud aims to work closely with more Indian enterprises as it opens the doors of its new data centre in Mumbai next month.

PUBLISHED : Thursday, 21 December, 2017, 11:40pm
UPDATED : Thursday, 21 December, 2017, 11:40pm

Alibaba Group Holding is set to expand its operations in India from e-commerce to cloud computing services with the launch next month of a new data centre in the country, Asia’s third-largest information technology market after Japan and China.

The Hangzhou-based company said on Thursday that its cloud computing subsidiary, Alibaba Cloud, has partnered with telecommunications services provider Global Cloud Xchange (GCX) to open that facility in Mumbai, the financial centre and most populous city in India.

It marks an escalation of Alibaba Cloud’s international development initiatives as it seeks to unseat Amazon Web Services (AWS), a unit of US e-commerce firm Amazon, as the world’s top provider of cloud services.

Simon Hu Xiaoming, the president of Alibaba Cloud, said in a statement that the new data centre, which will raise the total number of its facilities to 16 worldwide, will “enable us to work closely with more Indian enterprises” in the world’s sixth largest economy.

“These local enterprises are innovative and operating in growth sectors, and we look forward to empowering them through our cloud computing and data technologies,” said Hu.

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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.

Founded in 2009, Alibaba Cloud is the biggest provider of public cloud computing services in China. With about 2.3 million customers worldwide, Alibaba Cloud posted a 99 per cent year-on-year increase in revenue to 2.9 billion yuan (US$440 million) in the quarter ended September 30.

[Indian] enterprises are innovative … and we look forward to empowering them
Simon Hu Xiaoming, president of Alibaba Cloud

Revenue from massive-scale cloud services in India was estimated to represent just under 3 per cent of the forecast worldwide total market of US$28 billion this year, according to Toronto-based consulting firm Structure Research.

“The growth potential of India’s cloud services market remains bright given the sizeable presence of major systems integrators and a growing developer community that are building cloud-native applications,” said Structure Research director Jabez Tan.

From next month, Indian businesses of all sizes will be able to run their applications on Alibaba Cloud’s platform, which includes online storage resources and big data processing capabilities.

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Bill Barney, the chief executive of both Reliance Communications and subsidiary GCX, said in an interview that Alibaba Cloud’s entry into India will provide a big boost to the country’s position as “a strategic geographic hub for cloud connectivity services”.

GCX announced last month the development of its 16,650-kilometre Eagle express fibre-optic submarine cable system, designed to deliver the fastest telecommunications routes from Mumbai going east to Hong Kong and west to Italy.

For New York-listed Alibaba, which owns the South China Morning Post, its previous business expansion efforts in India were focused on retail. It recently bought an undisclosed stake in online grocer BigBasket. In March this year, Alibaba invested US$177 million in Indian online retail service Paytm E-commerce.