Alibaba officially launched its cloud business in Australia today, but the Chinese internet giant says it isn’t here to take on Amazon Web Services or Microsoft Azure. Well, not yet anyway.
Last week Alibaba revealed it was opening a data centre in Sydney and setting up a dedicated workforce based in Sydney and Melbourne to grow Aliyun, the company’s cloud business, in Australia.
Ethan Yu, Vice President of Alibaba Group and GM of overseas business at Alibaba Cloud, doesn’t view cloud providers like AWS and Micorosoft Azure as the competition. Instead, Aliyun is here to rival on-premise hardware providers.
“To be frank I don’t think we are competing with them, yet,” Yu told media in Sydney this morning. “We are actually team mates, we team up and compete with the on-premise workload. We are really competing with on-premise vendors for now.”
Yu argued less than 10 per cent of workloads run in the cloud, meaning there’s 90 per cent of the market still up for grabs.
The Australian cloud market is growing quickly according to analyst firm Telsyte. A high number of businesses are using cloud in Australia but only for a small portion of their workload. According to Telsyte fewer than 10 per cent of organisations with greater than 20 staff are not using any form of cloud Infrastructure-as-a-Service (IaaS), but the majority are still taking a test and learn approach.
Aliyun is the infrastructure business for the Alibaba Group. In 2009 it became a standalone business unit as the company embarked on externalising and commercialising the technologies it had built to operate its ecommerce business.
Alibaba Cloud currently has 2.3 million customers worldwide, including 651,000 paying clients. Last quarter revenue grew 130 per cent year-on-year to US$224 million. During China’s mega sales event Singles’ Day Alibaba Cloud technology supported all of Alibaba’s online marketplaces and facilitated 175,000 transactions per second during peak traffic spikes.
Analysts argue that while Alibaba trails AWS and Azure in technical capability, the sweet spot for Aliyun will be helping Australian businesses operate cloud services behind China’s firewall, as well as, domestic Chinese companies trying to set up an Australian presence.
Alibaba now has 14 data centres around the world, including in China and the Middle East. It’s this global network which the company believes makes it unique among the cloud vendors.
“We are a global cloud in terms of having a global infrastructure covering both west and east. We have comprehensive infrastructure in Asia, especially in China, so if an enterprise customer is looking for a global footprint including China data centres and connectivity to cover their Chinese audience I think we are the only one that can provide this kind of global coverage,” Yu said.
Yu argued Alibaba is one of the few “mature and comprehensive cloud providers in the world.” Adding it takes an existing business with the scale and resources of Amazon, Microsoft or Alibaba itself to develop those capabilities.
Yu said Aliyun had recently formed a global partnership with Accenture which will become one of their global service providers on top of Alibaba Cloud. “We will train as many consultants in Accenture as possible to make sure they are skilled up to migrate those on-premise IT solutions over to Alibaba Cloud,” he said.