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Alibaba bets big on cloud computing Alibaba bets big on cloud computing
Alibaba, China’s e-commerce giant, has announced a US$28.2 billion investment into its cloud computing infrastructure over the next three years. The sizeable investment positions... Alibaba bets big on cloud computing

Alibaba, China’s e-commerce giant, has announced a US$28.2 billion investment into its cloud computing infrastructure over the next three years. The sizeable investment positions Alibaba to challenge western counterparts, Microsoft and Amazon.

The investment will address operating systems, microchips and other semiconductors as well as add to its network of data centres that cater to 21 regions globally.

The company’s cloud computing arm reported revenue growth of 62% to 10.7 billion yuan in the last quarter of 2019.

The growth prompted CEO and Jack Ma successor, Daniel Zheng, to say cloud computing will now be Alibaba’s main focus.

Before the COVID-19 pandemic, e-commerce, although significant, was regarded as a fairly novel shopping method in China, with many citizens preferring traditional brick and mortar establishments. However, after government lockdowns the country has seen a dramatic rise in Alibaba users.

Services like Alibaba’s DingTalk – a communications app used widely to conduct contactless business which includes web-based learning platforms for school and university students – have risen in popularity in the first quarter of 2020 – the peak of Covid-19.

Bloomberg Intelligence analyst, Vey-Sern Ling, says the cloud computing division will focus, over the medium term, on boosting its infrastructure and its client base while expanding its offerings beyond the existing 500 products and services.

Alibaba’s cloud computing arm commands 46% of the cloud market in mainland China. Tencent Cloud has 18% market share and Baidu Cloud 8.8%.

Jeff Zhang, president of Alibaba’s cloud computing arm, says the latest investment will significantly help speed up the recovery process in a post-Covid-19 world.

https://www.reuters.com/article/us-china-alibaba-cloud-investment/alibaba-to-invest-28-billion-in-cloud-services-after-coronavirus-boosted-demand-idUSKBN22208E

https://finance.yahoo.com/news/alibaba-invest-28-billion-over-030000951.html

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