Alibaba’s Cloud Computing Market Strategy
Alibaba Group may be the underdog of the global cloud computing industry when compared to cloud giants like Amazon Web Services and Google, but it may have an advantage. It’s Chinese.
Earlier this week, Alibaba acquired a deal with the city of Dalian to build a cloud-computing center and provide online government services. This deal joins many between Alibaba and the Chinese government and has arisen through the Chinese fear of foreign technology.
Due to this fear, Alibaba’s cloud unit, Aliyun, has been able to gain experience in the Chinese market before challenging leaders like Amazon, Google, or Microsoft on a global scale.
James McGregor, at US communications consultancy Apco Worldwide, said, “Basically, they are following the political trends and they’re grabbing the business opportunities that result. China wants control of its information, of its data, of its news, of its technology food chain, and so there are huge opportunities.”
The cloud-computing sector has boomed largely because it has become cheaper for companies to store data in the cloud rather than maintaining servers in-house.
While Aliyun is still relatively small, China has the largest market share in cloud computing so it has plenty of room for growth. Acquiring enough expertise to become a major global player will take some time, so for the time being Aliyun is taking advantage of China’s unwelcoming environment for foreign providers. It has made cloud arrangements with other Chinese cities and provinces like Shanghai and Guangdong.
Cheng Jing, an Aliyun director, has stated his main priority: “First, we have to be sure our services can make money. If these services can also promote Ali’s relationship with the government then that’s a good thing.”