Alibaba spinoff moves fur­ther into the cloud

A divi­sion of the e- com­merce gi­ant read­ies to take on US com­pe­ti­tion

China Daily (Hong Kong) - - BUSINESS COMPANIES - By HE WEI in Shang­hai hewei@chi­

E-com­merce con­glom­er­ate Alibaba Group Hold­ing Ltd will ex­tend its cloud-com­put­ing ser­vices to over­seas mar­kets in March, as it at­tempts to grab a share of the pub­lic cloud arena from archri­vals such as Ama­zon. com Inc and Mi­crosoft Corp.

Aliyun, Alibaba’s spinoff cloud-com­put­ing divi­sion, is sched­uled to set up data cen­ters out­side China to pro­vide cloud-com­put­ing ser­vices to lo­cal en­ter­prises and Chi­nese com­pa­nies’ over­seas op­er­a­tions, the com­pany an­nounced on Tues­day.

By build­ing plat­forms for com­pa­nies to man­age and store data in the cloud, Aliyun will be­come the first Chi­nese com­pany to reach out to the for­eign pub­lic cloud seg­ment, days af­ter its US coun­ter­part Ama­zon an­nounced the launch of a sim­i­lar ser­vices in China.

“Af­ter five years of devel­op­ment and three years of com­mer­cial­iza­tion, Aliyun is able to pro­vide sus­tain­able ser­vices to cus­tomers, backed by its re­source­ful par­ent, Alibaba,” said Aliyun direc­tor Zhang Jing.

The ser­vice re­cently gained the world’s first gold cer­ti­fi­ca­tion for cloud se­cu­rity from the British Stan­dards In­sti­tute, a busi­ness stan­dards com­pany, which fur­ther guar­an­tees its re­li­a­bil­ity, Zhang noted.

Zhang de­clined to dis­close the first des­ti­na­tion for Aliyun’s global out­reach. But he im­plied two op­tions: the United States ( Ama­zon’s birth­place) or South­east Asia, thanks to its prox­im­ity to do­mes­tic busi­nesses.

As the coun­try’s largest cloud- com­put­ing plat­form, Aliyun pro­vides cloud com­put­ing ser­vices for hun­dreds of thou­sands of Chi­nese web­sites and e-com­merce ven­dors, banks, game de­vel­op­ers and oth­ers.

Three- fourths of the 188 mil­lion or­ders gen­er­ated from the Nov 11 on­line sales day were pro­cessed by the Alibaba cloud-com­put­ing sys­tem.

Alibaba has made a con­sis­tent push into do­mes­tic cloud­com­put­ing en­ter­prises. In Septem­ber, Alibaba ac­quired per­sonal cloud stor­age ser­vice Kan­box.

In Au­gust, Chi­naSoft In­ter­na­tional Ltd an­nounced a strate­gic agree­ment with Aliyun and the Lishui mu­nic­i­pal govern­ment for a State-funded cloud project in Zhe­jiang prov­ince.

Aliyun may team up with lo­cal tele­com car­ri­ers to avoid lo­cal reg­u­la­tory re­stric­tions, Zhang noted.

Over­all cloud ser­vices ex­pen­di­ture, in­clud­ing un­der­ly­ing net­work and server in­fra­struc­ture, will surge by 25 per­cent in 2014, hit­ting $100 bil­lion glob­ally, ac­cord­ing to

Af­ter five years of devel­op­ment and three years of com­mer­cial­iza­tion, Aliyun is able to pro­vide sus­tain­able ser­vices to cus­tomers, backed by its re­source­ful par­ent, Alibaba.” ZHANG JING ALIYUN DIREC­TOR

a re­port from IT con­sul­tancy IDC.

Cloud com­put­ing will help com­pa­nies re­duce em­ploy­ment, con­tract­ing, ac­quir­ing, test­ing and main­te­nance costs. Hence, in­vest­ment in this tech­nol­ogy will help com­pa­nies save money in the long run, said Paul Dean, a tech­nol­ogy an­a­lyst at global con­sul­tancy firm Ac­cen­ture China.

Small and medium- sized en­ter­prises are the ideal can­di­dates for cloud ser­vices, as they en­able com­pa­nies to make flex­i­ble IT in­put in the most cost- ef­fec­tive man­ner, said Dean.

For­eign ven­dors are eye­ing the ex­po­nen­tial po­ten­tial of the mar­ket. Ama­zon an­nounced ear­lier this month that it had formed part­ner­ships with the gov­ern­ments of Bei­jing and Ningxia Hui au­tonomous re­gion to de­velop cloud-com­put­ing ser­vices.

Un­der the ini­tia­tive, Chin­abased and multi­na­tional com­pa­nies will be in­vited to be­gin us­ing Ama­zon ser­vices to build their busi­nesses and run their ap­pli­ca­tions in the cloud.

Andy Jassy, se­nior vice-pres­i­dent of Ama­zon Web Ser­vices, said its cus­tomer base, thou­sands of which are Chi­nese cus­tomers that use the com­pany’s cloud com­put­ing ser­vice out­side China, is al­ready con­sid­er­able.

Mi­crosoft in­tro­duced its pub­lic cloud-com­put­ing ser­vices, Win­dows Azure, in China in June.

Since its de­but, Win­dows Azure has drawn more than 1,000 cor­po­rate users that make de­signs and ap­pli­ca­tions on the plat­form, said Xie En­wei, chief cloud of­fi­cer at Mi­crosoft’s China op­er­a­tions.

As the first multi­na­tional cor­po­ra­tion to bring pub­lic cloud ser­vices into China, Mi­crosoft has ad­justed to China’s reg­u­la­tions on pri­vacy pro­tec­tion, so that data be­ing pro­cessed or gen­er­ated by Chi­nese cus­tomers on the plat­form will re­main in­side China.

“Azure’s year-on-year growth has jumped to 150 per­cent since its de­but three years ago. We are quite op­ti­mistic about its fu­ture,and, no­tably, the Chi­nese mar­ket,” Xie said.

The fu­ture land­scape will be the con­ver­gence of the pri­vate cloud and the pub­lic cloud, as well as the hy­brid model, where the cloud co­ex­ists with the com­pa­nies’ cur­rent IT in­fra­struc­ture, said Dean.

Cloud com­put­ing may cre­ate 5 mil­lion job op­por­tu­ni­ties and more than 2.2 tril­lion yuan ($362.3 bil­lion) in out­put value across dif­fer­ent in­dus­tries in the next three years, ac­cord­ing to CCWRe­search, an IT think tank in China.

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