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