Alibaba announced plans this week to plough $1bn into its cloud computing division, Aliyun, in a bid to expand the company’s presence and establish new datacentres internationally. The move may give it the scale it needs to compete more effectively with the likes of Amazon and Google.
The company currently operates five datacentre in China and Hong Kong, and earlier this year set up a datacentre in Silicon Valley aimed at local startups and Chinese multinational corporations.
The $1bn in additional investment will go towards setting up new cloud datacentres in the Middle East, Singapore, Japan and in various countries across Europe.
“Aliyun has become a world-class cloud computing service platform that is the market leader in China, bearing the fruits of our investment over the past six years. As the physical and digital are becoming increasingly integrated, Aliyun will serve as an essential engine in this new economy,” said Daniel Zhang, chief executive officer of Alibaba Group.
“This additional US$ 1 billion investment is just the beginning; our hope is for Aliyun to continually empower customers and partners with new capabilities, and help companies upgrade their basic infrastructure. We want to enable businesses to connect directly with consumers and drive productivity using data. Ultimately, our goal is to help businesses successfully transition from an era of information technology to data technology,” Zhang said.
The company said it also plans to use the funds to expand its partnerships through its recently announced Marketplace Alliance Program, a move that sees it partnering with large tech and datacentre operators, initially including Intel, Singtel, Meeras, Equinix and PCCW among others to help localise its cloud computing services and grow its ecosystem.
The investment if anything confirms Alibaba’s intent to grow well beyond Asia and displace other large public cloud providers like AWS, IBM and Google, which already boast significant global scale.