Alibaba Group is setting aside US$1 billion to drive growth in its cloud business, Aliyun, as the Chinese internet giant looks to edge out US rival, Amazon.
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Though it faces challenges attracting U.S. customers unfamiliar with the brand and its offerings, Mr. Hu said, Aliyun aims to become serious competition for Amazon.com Inc.’s cloud-computing unit, Amazon Web Services.
A portion of the $1 billion will go toward expanding Aliyun, Alibaba’s cloud service and the largest cloud computing platform in China.
Daniel Zhang, CEO of Alibaba Group, said: “This additional $1 billion investment is just the beginning; our hope is for Aliyun to continually empower customers and partners with new capabilities, and help companies upgrade their basic infrastructure”. Now the company believes its infrastructure, processes and products are mature enough to start exporting to Europe, the Middle East and Japan to compete with Amazon, Microsoft and IBM.
Aliyun has quite a bit of catching up to do. In its latest financial report, Amazon surprised market analysts by posting a $9 billion profit – rare for a company that’s been operating mostly in the red.
By March, Alibaba’s cloud computing revenue had also increased by more than 80 percent compared to the previous year, but to a sum of just $63 million. Aliyun already hosts five data centers in China and Hong Kong. The decision to collaborate with Yonyou also comes on the heels of other partnership announcements with companies such as Intel and the data center company Equinix.
Besides data centres, Alibaba Group also has its worldwide Marketplace Alliance Program, a channel programme that offers Aliyun cloud computing services via partners such as Singapore’s Singtel.
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China’s nascent cloud market is growing rapidly, according to consulting firm Bain & Co. A company executive said in a press conference in Beijing earlier this month that another Aliyun cloud data center would come online in the US within several months.
