Is Alibaba Looking to Challenge American Clouds

Here is what we know so far. Alibaba, the largest ecommerce company in China has a cloud computing component, called Aliyun (or AliCloud). It was established in the later part of 2009, with R&D centers and operators in Hangzhou, Beijing and Silicon Valley.

Aliyun has steadily been growing its cloud offering, and in earlier last month, Aliyun entered into a partnership deal with Inspur, the largest high-end cloud computing company in China. Thereby enabling them to offer a complete package of cloud computing services within China. Their clientele are mainly either local businesses operating locally or local businesses operating in other countries.

It is reported that last year, Alibaba had revenue of $102 million just from cloud and infrastructure sales, this is a 26% increase from the year before.  Also, back in May of this year, Alibaba made a clear statement on their cloud-focused intentions, “We have made, and intend to continue to make, strategic investments and acquisitions to expand our user base, enhance our cloud computing business, add complementary products and technologies and further strengthen our ecosystem. For example, we expect to continue to make strategic investments and acquisitions relating to mobile, O2O services, digital media, category expansion as well as logistics services.”

Now, with just four total datacenters (three large data centers in China and a smaller one in Hong Kong,) their infrastructure is relatively small compared to the giants of the US, such as AWS, Google or Microsoft. However, Alibaba has made some significant moves towards the American cloud market. Within the last few months alone, Alibaba has made a number of investments recently into cloud related companies within the US.

In March of this year, Alibaba made a $215 million investment in a messaging app called Tango. Alibaba also contributed to a $170 million round for Fanatics, an online sports merchandise retailer, as well as in a $250 million round for a transportation service app called Lyft. Then, just last week, Alibaba invested $120 million into Kabam, a video game start-up.

Moreover, Alibaba has filed for IPO to be traded in the US in the NYSE in what is predicted to be America’s largest IPO ever. Market value of Alibaba is approximated to be around $200 Billion, larger than the value of Facebook, Ebay or Amazon. Though trade was due to be release to trade tomorrow (08/08/2014),  as 8 is a lucky number for Asian cultures, and thereby giving double significance to the date. However, this has now been moved till next month due to some regulatory issues.

Though they clearly have a long road ahead. With all these recent developments, it will be interesting to follow further developments and watch to see if, and how, Alibaba will come to challenge Americas more established cloud giants.