The Alibaba Group, China's e-commerce giant, has US rival Amazon in its sights and its not just about online retail. The chinese juggernaut is increasing its investment in overseas data centers over the next 18 months in a push to steal some of Amazon’s lucrative cloud computing customers. The Chinese company wants to increase its market share in cloud computing which presently only accounts for a minute portion of the group's overall revenues.
Simon Hu, president of Aliyun, Alibaba’s cloud computing unit, said the company would be establishing data centers in Asia, the Middle East and Europe but did not disclose how much it intends to spend doing so. He said it also plans to build a technology hub with a data center in Dubai which will give the company a competitive edge in a market largely ignored by Amazon and other cloud computing competitors Microsoft and Google.
“The cloud business will be a very important sector for Alibaba. We hope to match or even surpass Amazon in three to four years.” said Hu.
Amazon Web Services, Amazon’s cloud business, earned US$1.57 billion for the first quarter of 2015, putting it on track to meet analysts’ estimates of US$6 billion in earnings for the year.
Alibaba’s recent quarterly cloud revenue earnings were US$63 million which was an 82 percent increase over the same period last year.
Hu said increasing the company's cloud computing share is one of Alibaba’s main growth strategies for the next decade.
At present Aliyun has 200 data management and cloud computing service partners but has plans to increase this to 2,000 over the next three years.
One of the company's sales and marketing lures is its recently unveiled data protection pact where customers are guaranteed “absolute ownership” of their data.
Hu said Aliyun currently analyses more than 100 terabytes of information each day for security threats like malware but did not make any comment on how the company would address data requests from the Chinese government.
The news comes as Google announced Nearline, a cloud based archival storage product that directly targets Amazon’s similar Glacier cloud-based storage.
Google’s new offering boasts three second retrieval times versus three hours for Amazon’s Glacier and the company will give away 100 Petabytes of free storage for the first six months. That's a nearly $1 million per month freebie if taken full advantage of, highlighting just how seriously Google is taking the threat of Amazon.
Both the Google and Amazon services are priced at $0.01 per gigabyte per month, highlighting the fierce competition Amazon is under in cloud computing from both domestic and foreign competitors.
Amazon is widely regarded as the world leader in cloud computing (disclosure: we host our site with them and they’re great!), and the world is quickly taking notice.
Expect to see increased pressure from a wide variety of players including Google, Aliyun, IBM, Microsoft and others in this red-hot space.