Faced with Amazon and Microsoft, Alibaba wants to become a cloud giant

by bold-lichterman

Alibaba may well be talked about for its e-commerce sites and its 350 million active buyers, we generally know less that the firm founded by Jack Ma also dreams of itself as the future giant of cloud, a market in which he is stepping up initiatives so as not to let the American giants occupy the ground alone.

It all started in September 2009, when Alibaba decided to launch Aliyun, a subsidiary whose objective is to become the armed wing of the group in the cloud computing. Initially designed for Alibaba’s own data storage and management needs, the offer was subsequently extended to companies that market their products on the group’s sites, then to third-party companies with data needs. cloud.

Certainly, the activity “Cloud computing and Internet infrastructureIs still marginal. At $ 63 million in sales in the first quarter, it represented only 2% of the group’s total sales on the period. But with 82% growth over one year, it is one of the most dynamic in the company.

Cover all regions of the world

Suddenly, Alibaba does not intend to stop there. If Aliyun had so far opened four datacenters in China – in Beijing, Hangzhou, Qingdao and Shenzhen – to meet the country’s domestic demand, the Alibaba subsidiary is no longer hiding its international ambitions. After’opening of its first data center abroad A year ago, in Hong Kong, the company announced in March the opening of a second in the heart of Silicon Valley in order to directly address the American digital ecosystem. And the group intends to continue this momentum all over the world. He has present this month a roadmap providing for the opening of centers in South East Asia of course, but also in Europe and Japan.

The band has moved fastest in the Middle East with signing this month a partnership with Meraas, a holding company based in Dubai, whose objective is the creation of a joint venture intended to market its solutions to private companies and public administrations in the Middle East and North Africa.

An effective strategy

In the market cloud computing, estimated at $ 17 billion annually by Synergy Research Group and dominated by heavyweights like Amazon and Microsoft, Alibaba has a very specific strategy: when opening its datacenter in Silicon Valley, Aliyun explained that it would primarily target Chinese companies present in the United States, in order to build up a first portfolio of customers. It is only in the second half of the year that the company plans to “gradually expand its products»To international customers.

Aliyun’s international strategy is to help Chinese companies expand into the world, and help foreign companies enter the Chinese market. Launch of our Silicon Valley Data Center Enables Internet Companies in China to Grow Business in North America», Explains Simon Hu, president of Aliyun, in an interview on one of the group’s sites. Thus, nearly six years after its launch, Aliyun claims 1.4 million customers worldwide. But its ambitions are much broader. “We firmly believe that our products and services can not only meet the demand of Chinese enterprises, but also serve the international customers who run international enterprises.Mr. Hu continued.

To finance its expansion abroad in the cloud and the required infrastructure, it must be said that Alibaba has a significant war arsenal: the group raised $ 25 billion when it was floated on the New York Stock Exchange in September 2014.

A mastodon named Amazon

But Alibaba is not alone in the cloud computing and must face competition from players who have already taken the lead, such as Microsoft, IBM, Google and Salesforce or, quite simply, Amazon which, on its own, generates more revenue than its four main competitors combined, according to one cabinet study Synergy Research Group. And the threat is all the more serious as the Seattle giant has decided to face Alibaba on its own land. At the end of 2013, it indeed announced that it would market its offers in the country, first with a few partner companies – including the smartphone giant Xiaomi -, before extending its offer to all companies.

Alibaba’s ambition is also reminiscent of Amazon’s. Also e-commerce, the group of Jeff Bezos had launched Amazon Web Services (AWS) in 2006. A little less than ten years after its launch, the Seattle firm unveiled for the first time, in April, the results of this activity. The numbers speak for themselves: AWS generated $ 4.6 billion in revenue last year, up nearly 50% year on year. And the activity is proving particularly lucrative: while the whole group posted a loss of 241 million dollars for the whole year, the AWS segment alone posted a net profit of 660 million dollars. Enough to arouse Alibaba’s appetite.

  • The market of the cloud should represent 5 billion euros in 2014 in France, according to the PAC CloudIndex, which integrates supplies and services around the cloud;
  • The maturity of the French market: only 12% of French companies with at least 10 people purchased services from ” cloud computing ” in 2014, according to an INSEE study ;
  • Main actors : Cloudwatt, OVH, Orange Business Services …
Photo credit: Alibaba.