Chinese internet giant Alibaba is bringing its cloud offering to Australia, opening a data centre in Sydney by the end of 2016. The move will kick off a race with Amazon Web Services and Microsoft Azure to claim market share locally.

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Alibaba Cloud, the cloud computing arm of Alibaba Group, will open four new data centres outside China by the end of 2016 in the Middle East (Dubai), Europe, Australia and Japan. Established in September 2009, Alibaba Cloud aims to be a major global cloud provider and currently has 2.3 million customers worldwide, including 651,000 paying clients.

Alibaba opened a local office in Australia this year and has so far mostly focused on enticing Australian retailers to sell to Chinese consumers via its Tmall platform. The company is also planning to bring its financial products to Australia, announcing it will launch Alipay Down Under in partnership with CommBank.

The company said a dedicated team will be based in Australia to build up a cloud ecosystem with local technology partners to drive cloud and big data business in the Asia-Pacific. Alibaba Cloud will bring its most popular cloud services in data storage and processing services, enterprise-level middleware, and cloud security services to the Australian market.

“Alibaba Cloud has contributed significantly to China’s technology advancement, establishing critical commerce infrastructure to enable cross-border businesses, online marketplaces, payments, logistics, cloud computing and big data to work together seamlessly. We want to establish cloud computing as the digital foundation for the new global economy using the opportunities of cloud computing to empower businesses of all sizes across all markets,” said Simon Hu, President of Alibaba Cloud.

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.

On a recent investor call Alibaba co-founder and executive vice chairman, Joseph Tsai, described the cloud division as a strategic initiative. For the quarter ended September 30, 2016 paying customers for cloud computing grew to 651,000, up from  from 577,000 in the previous quarter, driving revenue growth to 130 per cent year-over-year to US$224 million while losses narrowed. In late October, AliCloud announced price cuts across its product offerings, some as high as a 50 per cent.

Expanding global footprint

The data centre in the Middle East, located in Dubai, United Arab Emirates, commenced initial operations today. In Dubai, Alibaba has formed a joint venture with Meraas Holdings called YVOLV.

Alibaba’s first European data centre will open in Germany in partnership with Vodafone Germany. The centre is co-located in Vodafone’s data facilities in Frankfurt, one of the leading technology hubs in Europe with a highly developed infrastructure supporting technological innovation.

The Japan Data Centre, hosted by SB Cloud Corporation, a joint venture between Softbank and Alibaba Group, will provide Japanese enterprises with competitive and enhanced public cloud computing services from Alibaba Cloud. With the joint venture, Alibaba Cloud will further expand its cloud computing service platform by leveraging SoftBank’s extensive enterprise customer base in Japan.

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