Alibaba announces $1 billion overseas cloud investment

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The investment is thought to be a response to an unprecedented revenue slowdown for Alibaba

In an effort to combat a historical slowdown, Alibaba has revealed a $1 billion investment to support its international cloud computing customers and partnerships. The investment, which will be injected over the next three fiscal years, consists of “financial and non-financial incentives, such as funding, rebates and go-to-market initiatives,” the Chinese company stated.

In addition to the investment, the company also announced new products and services as part of its larger strategic roadmap. These include: Cloud Enterprise Network (CEN) 2.0, which provides global intelligent networking to support enterprises’ global expansion; a new storage product called ESSD Auto PL, which provides block storage services and supports automatic scaling within seconds to allow businesses to handle sudden traffic surges; and ACK One (Alibaba Cloud Distributed Cloud Container Platform), a multi-region and multi-cluster container management platform to provide management, delivery and operation experience for enterprises.

The company has also opened three customer service centers in Kuala Lumpur (Malaysia), Porto (Portugal) and Mexico City (Mexico) under its global delivery and service program, which is designed to enhance the cloud adoption process for customers.

According to Gartner, Alibaba Cloud claimed a 9.5% market share in 2021, falling behind Microsoft (21%) and Amazon (39%), but pulling ahead of other giants like Google (7.1%).

Alibaba’s fiscal first-quarter earnings this year, however, were somewhat of a letdown, with the company reporting its first flat revenue growth on record, likely due to the resurgence of Covid-19 in China, which shut down facilities and further dinged the already-injured economy.

The decision to focus on cloud makes sense for Alibaba because while cloud computing represents only 9% of its overall revenue, the company considers this area critical to its future growth. In fact, Alibaba has invested considerably into extending its cloud and data center reach internationally, establishing new data centers in markets such as Singapore and Thailand. CNBC reported that this move puts the Chinese cloud company in direct competition with Amazon.

Further, Alibaba in 2020 announced an astonishing 200-billion-yuan ($28.26 billion) investment in its cloud computing division. At the time, the company said that the funds will go towards infrastructure and technologies related to operating systems, servers, chips and networks.