Alibaba steps up presence in international cloud market

Alibaba’s cloud computing business unit has announced worldwide expansion plans with four new data centres in key locations around the globe.

While the growth of cloud computing has been dominating headlines in the technology world for some time, China’s influence has been relatively low-key to date with its own giants mostly focusing on the domestic market. AWS, Google, Microsoft and IBM have marched to the top of the segment though if experience tells us anything it won’t be long before the Chinese are making noise at the top of the table.

The team has announced it will open four new data centres in Middle East (Dubai in conjunction with YVOLV), Europe (co-located in Vodafone’s data facilities in Frankfurt), Australia (Sydney) and Japan (hosted by SB Cloud Corporation), as it looks to establish itself more prominently beyond Chinese borders. The team already have 2.3 million customers however the new assets will give Alibaba more credibility in the international space.

“The four new data centres will further expand Alibaba Cloud’s global ecosystem and footprint, allowing us to meet the increasing demand for secure and scalable cloud computing services from businesses and industries worldwide,” said Sicheng Yu, GM of Alibaba Cloud Global. “The true potential of data-driven digital transformation will be seen through globalization and the opportunities brought by the new global economy will become a reality,”

The expansion shouldn’t come as much of a surprise as this is a trend which has been witnessed before in the networking and smartphone segments. One or more Chinese companies create a market dominance in the domestic market relegating international players to tier-two rankings, helped by the restrictions placed on international businesses by the Chinese government, which creates huge amounts of cash for the business, before using this financial weight (and the safety of the domestic cash-cow) to expand worldwide.

Huawei did it effectively to dominate the network infrastructure space and Xiaomi are having a good crack at it in the smartphone space currently. This is not necessarily a mandatory playbook for Chinese businesses to expand into the global scene, but it has been an effective strategy to date. If it isn’t broken…

AWS, Google, Microsoft and IBM won’t be at emergency stations for the moment, however they should be keeping a wary eye on the situation. NSN and Ericsson probably weren’t that worried about Huawei during the early stages of its international expansion, they were dominant in the market share rankings after all, but look at how things worked out there.

Outside of the cloud computing world, there could also be other rumblings in the internet world. Baidu is the dominant internet search player in the Chinese market, and few would be surprised if it had a crack at the worldwide market, and WeChat owner Tencent could be another to try its hand. WeChat is the social media platform in China, and after the Tencent team announced the acquisition of Supercell in June for $8.6 billion, it now has a platform to launch into the international arena.

Alibaba has been making noise about the international cloud space for some time now, though this certainly is a milestone in its development, most notably in the European space where data residency has been a growing conversation. Having a data centre in the regulation-conscious German market certainly puts it in a healthy position to tackle the privacy-sensitive EU region.