Can Alibaba Cloud take on AWS, Google, IBM and Microsoft in Asia?

Can Alibaba Cloud take on AWS, Google, IBM and Microsoft in Asia?

Channel will be key to future market growth

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Alibaba Cloud is extending services and capabilities outside of China at a rapid rate, targeting the wider Asia Pacific market to close the gap with industry rivals.

That’s according to analyst firm GlobalData, which considers the technology giant as a credible threat to Amazon Web Services (AWS), Microsoft Azure, Google Cloud and IBM across the region.

“While global cloud providers - AWS, Google, IBM and Microsoft - have been active in APAC, there are many providers competing for a share of the market. In particular, Alibaba Cloud is a rising cloud provider and a force to be reckoned with,” said Siow Meng Soh, technology analyst at GlobalData.

Soh said Alibaba Cloud has almost 50 per cent of the infrastructure-as-a-service (IaaS) market share in China, with the vendor’s annual revenue growing 101 per cent during FY2018 to $2.1 billion.

Furthermore, the provider also has a “strong presence” across various industries in China, including retail, e-commerce, logistics, manufacturing and banking.

Specifically, the business offers over 240 vertical solutions, which Soh believes can be potentially rolled out both regionally and globally, with the vendor working to a “DevOps culture and speed”.

“China has nearly three-times the number of Internet users compared to the US, which speaks volumes around its ability to scale,” Soh added.

“Alibaba Cloud is now betting big on some emerging markets such as India, Malaysia and Indonesia while competing with others in developed markets such as Hong Kong, Japan, Singapore and Australia.”

Key to such expansion will be the channel, with the vendor seeking to establish up to 10,000 partners globally, backed up by alliances with Vodafone, Singtel, PCCW, Data Pipe, Malaysia’s TIME, Indonet and SK Telecom.

As reported by Channel Asia, Alibaba Cloud launched a dedicated partner program across ASEAN in August, designed to drive market growth through the channel.

Officially labelled ASEAN Partner Alliance Programme, the initiative aims to develop an ecosystem compromising of service providers, system integrators, independent software vendors (ISVs) and start-ups.

In addition to alliance vendors, the program will attempt to recruit 150 solution partners during the next 12 months, backed up by the training of 600 sales and technology personnel.

Delving deeper, Soh said Alibaba Cloud is also "closing the gap" with rivals in terms of products and speed of releases, such as Apsara; PAI; Data Lakes; Link Kit and ElasticSearch.

“With the ongoing migration of IT to the cloud, telecom providers and IT service providers have developed a cloud practice to help customers migrate their workloads, implement hybrid cloud and manage multi-cloud environments,” Soh explained.

“These providers often partner with top players, particularly AWS and Microsoft Azure, to help customers keen to use the public cloud services.

“Going forward, they need to broaden the list of partners since customers are likely to be using a wider range of cloud services and Alibaba Cloud should be on the list for consideration.”

More generally speaking, GlobalData forecasts that an “insatiable trend” of product launches by cloud providers will drive the regional cloud services market to expand at a compound annual growth rate of 27.7 per cent from $16.2 billion in 2017 to $55.2 billion in 2022.

According to Soh, such growth is “riding on the back” of increased adoption of cloud services, including artificial intelligence (AI), big data analytics, blockchain and Internet of Things (IoT).

Tags MicrosoftGoogleAmazon Web ServicesAlibaba CloudGlobalData

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