Alibaba is doubling down on cloud computing

Alibaba is doubling down on cloud computing with a Rmb200 billion ($28 billion) three-year investment plan as the coronavirus pandemic fuels demand for internet infrastructure and technologies that enable computing from anywhere. The Chinese ecommerce group, one of the world’s top cloud providers, said it would spend the money to build next-generation data centres and develop related technologies including semiconductors and servers… The company has accelerated its cloud spending in recent years as it manoeuvres to gain control of China’s market. It had 46 per cent of the market in the fourth quarter… while Tencent Cloud had 18 per cent and Baidu Cloud had 8.8 per cent… Cloud computing is one of Alibaba’s fastest- growing businesses, with revenue in the fourth quarter increasing 62 per cent year on year to Rmb10.7 billion… The company operates 10 data centres in China and 11 more in other countries. According to analysts a large portion of Alibaba’s capex in recent years had already gone to beefing up its cloud operations, as it tries to catch up with Amazon and Microsoft globally. Unlike Amazon Web Services, Alibaba’s cloud services have yet to turn a profit. 

Ryan McMorrow