Alibaba wants to challenge Amazon Web Services: Good luck with that

If someone wants a public cloud suggestion from me, I immediately think of Azure, Amazon Web Services (AWS), Google Compute Engine, and Rackspace. If those won’t do, a few seconds of thought brings Bluelock, FireHost, and Terremark/Verizon to mind. Alibaba? The Chinese e-commerce giant? Nope, their name would never occur to me.

Alibaba wants to change that.

In China, Alibaba’s cloud service division, Aliyun, has four data centers on the mainland and one in Hong Kong. That’s great if you have a business in China, but Alibaba wants to be a global cloud power.

Indeed, Aliyun President Simon Hu told the Wall Street Journal that it wants to go head-to-head with AWS. “We see that Amazon took 10 years to get to where it is today. Aliyun is just past its sixth year and we hope to match or outperform Amazon within three or four years.”

Well, you have to give the company credit for chutzpah if nothing else. I find it hard to believe that any public cloud company is going to catch up to AWS. By Gartner’s count, Amazon’s Infrastructure as a Service (IaaS) cloud capacity is 10 times greater than the next 14 providers… combined.

Gartner vice president and distinguished analyst Lydia Leong also said the IaaS solution ecosystem is rapidly consolidating around a small number of market leaders. This means that “Few providers have the financial resources to invest in being broadly competitive in the cloud IaaS market.”

In my opinion, as public cloud pricing finally starts to move up and private clouds grow more popular, fewer business customers will be looking for new public cloud providers anyway. Future growth, in my opinion, will come from private and hybrid cloud vendors.

Alibaba, of course, isn’t paying any attention to me. Aliyun opened its first overseas data center in Santa Clara, Calif., in Silicon Valley in March and plans to set up another in the eastern U.S. At the time, Aliyun executives said it was just “testing the water.”

Now, Alibaba is diving in. The company is throwing a cool billion into battling AWS. Besides adding new data centers in the United States, the company will also be setting up new Aliyun data centers in the Middle East, Singapore, Japan and Europe.

In a statement, Hu said, “Cloud computing will become [the] fundamental infrastructure for new economic development. Aliyun, together with Yonyou [China’s largest independent software vendor], will bring comprehensive cloud computing solutions to empower more enterprises, drive the development of supply chains, enable cloud consumer marketing, and bring disruptive transformation to the industry.”

That sounds good, but, you know, it’s old news now. A billion dollars is a lot of money, but is it enough cash to make a global splash in the cloud market in 2015? I doubt it.

Still, with a strong base in China, I’m not ready to completely dismiss Alibaba’s chances. I just wouldn’t bet on it.

Comments

  1. Yeah, I don’t see it happening for Alibaba either. Throwing $1B at the opportunity is nice, but as Microsoft found out in smart phones, throwing money at the opportunity does not mean that it will happen.

    And frankly, with all the Chinese government hacking incidents, there has to be a lot of doubt in the minds of non-Chinese companies that the Chinese government probably has their hooks into all the data stored in the Alibaba cloud, whether with permission or not.

    This reminds me of Samsung Data Services announcing their intentions to become a Top 5 IT services provider just before the Asian market meltdown about a decade ago. They aren’t even a Top 5 Asia-Pacific provider now, let alone worldwide.

    Like

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