E-commerce giant Alibaba Group Holding Ltd (阿里巴巴) is an underdog in the global cloud computing industry, but it has one thing going for it: It is Chinese.
Alibaba this week scored a minor deal with China’s northeastern port city of Dalian to build a cloud computing center and provide online government services, such as bill payment.
The pact is a small part of a growing portfolio of similar cloud services tie-ups between Alibaba and government bodies around China and comes against a backdrop of Beijing’s deepening paranoia about foreign technology.
The domestic alliances will help Alibaba’s cloud unit Aliyun (阿里雲), literally “Ali Cloud,” build scale and gain experience before any global campaign to challenge market leaders Amazon.com Inc, Microsoft Corp and Google Inc.
“Basically, they are following the political trends and they’re grabbing the business opportunities that result,” said James McGregor, chairman for Greater China at US communications consultancy APCO Worldwide. “China wants control of its information, of its data, of its news, of its technology food chain, and so there are huge opportunities.”
The sector has boomed as it has become cheaper for companies to store data on remote servers, or in the cloud, rather than maintaining servers in-house.
Global cloud IT infrastructure spending is expected to grow 21 percent to US$32 billion this year from a year earlier, according to US market researcher International Data Corp, and rise to US$52 billion by 2019.
For the time being, Aliyun is small.
It accounted for just 1 percent of Alibaba’s overall revenue for the year ended on March 31, but it says that in China, it has the biggest market share in cloud computing.
Building up expertise to become a global player requires a great deal of money, time and resources. For now, Aliyun is working on expanding market share at home to profit from China’s sheer scale and an unwelcoming environment for foreign cloud service providers.
Alibaba has forged cloud agreements with more than a dozen Chinese provinces and cities, including Hainan, Guangdong, Tianjin and Shanghai.
Aliyun also works with China Meteorological Administration, China Central Government Procurement Center and the state railway service center.
The deals range from developing cloud storage solutions to helping the government of Guizhou Province gather and crunch data to optimize its traffic lights.
In April, Aliyun announced a deal with state oil and gas giant China Petroleum & Chemical Corp (中國石油化學), also known as Sinopec, to create a cloud computing system to track its petrochemical production chain and emissions.
Cheng Jing, an Aliyun director who deals with government agencies, said his primary consideration was the bottom line.
He said the company could be a national enterprise and make contributions to China’s development, citing Jack Ma (馬雲), Alibaba’s charismatic founder and executive chairman.
“First, we have to be sure that our services can make money,” he said. “If these services can also promote Ali’s relationship with the government, then that’s a good thing.”
Alibaba is doing the right thing, Gartner Inc Beijing-based analyst Jimmie Chang (張致銘) said. “Partnering with government will help Alibaba become more valuable in China, hence more valuable to the global companies to do business in China, hence more valuable to the global market.”
Aliyun said last week it had partnered with a number of foreign firms to help it offer enterprise cloud computing overseas.
Those included Intel Corp; telecoms firms Singapore Telecommunications Ltd and Hong Kong’s PCCW Ltd (電訊盈科); and data center company Equinix Inc.
This move is a step in the right direction for Aliyun and could eventually help it become a real enterprise player, analysts said.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS