Alibaba Expands Again

The cloud computing industry is moving at a rapid pace, and every player is under a lot of pressure to constantly expand and innovate, to keep pace with the intense competition. Recently, Google opened its flagship product called Spanner that has been driving its operations for many decades, to cloud users. Microsoft is coming up with a slew of new features such as Azure IP Advantage and Azure AD B2B. AWS, the market leader, is entering into lucrative partnerships, with Snap being its latest customer. Not to be left behind is Alibaba – the Chinese giant that is making a big impact in the global cloud computing industry.

Already, this company is having an aggressive expansion plan, as it opened new data centers in Australia, Japan and Dubai to meet the growing needs of its customers in these regions. Besides setting up new centers, Alibaba has more than doubled its existing facility in Hong Kong to better serve the needs of its Asia-Pacific customers. Primarily, this expansion will meet demand in the areas of disaster recovery, data storage and analytics, middleware, and cloud security services. At present, Alibaba is the largest cloud computing service provider in China.

The company has announced that this expansion is in tune with its strategy to become the preferred cloud service provider world over. It sees itself as a competitor to Amazon Web Services (AWS) – the largest provider in the world today.

So, why are companies scrambling so much to dominate the cloud industry? The cloud industry grew by 16.5 percent in 2016, and Gartner sees the same level of growth in 2017. Organizations around the world, regardless of their size, want to move away from legacy systems and into cloud services to tap into the many benefits that come with it. Currently, AWS and Microsoft account for the lion’s share, though other companies like Google and IBM are catching on.

Alibaba also wants to join in this party, and this is why it is embarking on a “build” approach. In this model, the company wants to build new facilities and expand existing ones, and it believes that such grand facilities will surely bring in users. This strategy is slightly different from the ones followed by companies like Google that want to widen its offerings, so customers get the best value for their money.

However, this strategy has paid rich dividends for Alibaba, as it reported a growth of 115 percent over the last year. Though its revenue of $254 million is a drop in the bucket when compared to the revenues of AWS, Microsoft and Google, it has come within a short time. Over the last year alone, it saw its customer database increase by 100 percent. For the sake of comparison, Amazon’s revenue was $10 billion in 2016.

Currently, Alibaba has operations in 14 global centers including Dubai, London, Sydney, Hong Kong and mainland China. At this rate of growth and expansion, we can soon expect Alibaba to give the market leaders a stiff competition.

About The Author
Lavanya Rathnam is a professional writer of tech and financial blogs. Creative thinker, out of the boxer, content builder and tenacious researcher who specializes in explaining complex ideas to different audiences.
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