Alibaba Cloud expands its global reach with 4 new foreign facilities

Alibaba Cloud plans to open four new data facilities outside China, the cloud unit of Alibaba Group Holding said on Monday, as it seeks to grab global market share from leading players Amazon. com Inc and Microsoft.

The data facilities in Dubai, Germany, Japan and Australia will extend the reach of China’s leading cloud computing service provider to every major continent. This is the latest step in the unit’s $ 1 billion infrastructure investment drive.

Also known as Aliyun, the unit has flourished domestically thanks to China’s strategic emphasis on building domestic cloud technology, while foreign companies have grappled with stringent licensing restrictions in the country.

However, it accounts for a much smaller slice of the global market for cloud computing, defined as the storage of data on remote networks rather than local servers, which is expected to reach $ 135 billion by 2020, according to research firm Canalys.

Alibaba Cloud is forecast to take 7.8 percent of that market, while leading players Amazon. com Inc, Microsoft, International Business Machines Corp and Alphabet Inc are expected to account for a combined share of 69.1 percent.

Yu Sicheng, the head of Alibaba Cloud, said the unit’s strength in China was a significant advantage and a lynchpin in the company’s globalization plans.

The new additions bring Alibaba Cloud’s total number of foreign cloud facilities to eight, surpassing the six within China, though the majority of the company’s data volume remains squarely within China.

Yu declined to comment on when the unit will likely post a profit, even as it has seen six quarters of consecutive tripledigit growth, to become Alibaba’s fastest- growing business sector.