Menu

Alibaba Announces Plans To Expand Data Centers To Compete With Amazon

alibabaamazonAmazon has remained the industry leader for cloud computing, and despite efforts from other major cloud services like Google and Microsoft, Amazon hasn’t been knocked down from that top spot yet. But according to recent reports from Bloomberg and Forbes, Alibaba has announced that it plans on investing more into new data centers — including one in the U.S. — in order to challenge Amazon’s grip on the industry.

In addition to a data center in the U.S., the Chinese-based e-commerce corporation is also planning on building out data centers in India and the Middle East. According to Bloomberg, Alibaba’s cloud service is attempting to reach new customers outside of China “as it tries to match or outperform Amazon within three years.”

Aliyun, Alibaba’s cloud service, is predicted to be responsible for at least $1 billion of Alibaba’s total revenue by 2018, and the company expects that it will boost revenue by providing cloud-based services for businesses in the finance and online gaming industries, as well as for government agencies.

“The cloud business will be a very important sector for Alibaba,” said Aliyun president Simon Hu at a press conference in Beijing on July 22. “It took Amazon 10 years to get where it is today. It took us six years, and we hope to match or even surpass Amazon in three to four years.”

The Wall Street Journal reported that one important feature of Aliyun’s service is something called the “Data Protection Pact,” which promises that all customers using the service will have “absolute ownership” of the data stored in the company’s cloud, and that customers will have the right to access, share, or delete their data at any time.

Most importantly, the pact states that Aliyun is not permitted to alter or delete any data belonging to customers — it seems likely that the decision to emphasize this pact is a way to prove to Western audiences that despite being based in China, Alibaba is committed to providing the same data security as cloud services based in the U.S. can provide.

“While the need to be on top is desired by every cloud provider such as Amazon, Google, Alibaba, etc., it would be quite interesting to see on whose side the scale will be tilted,” says Robert Joseph, CEO, Step Ahead Solutions, Inc. “Is the World ready for another mega cloud provider from the east? I think leveraging the cloud to maximize organizational advantages and ROI is key to cloud adoption.”

So will Aliyun be able to drag down Amazon from its throne? Only time will tell — but it seems that Alibaba has never been more determined to do so.



Investors Chronicle