76% annual growth rate takes Alibaba into the clouds
24 July 2019 | Jason McGee-Abe
It’s been a decade since Alibaba launched its cloud business in China and now the company has expanded its services across the world. Yeming Wang, senior director and head of Global Key Accounts for Alibaba Cloud, talks about the company’s plans.
Ask a westerner to list the biggest over-the-top (OTT) tech companies in the world and most will list Apple, Amazon, Alphabet – the owner of Google – and Facebook in an instant. Few, unless nudged, will include Alibaba, even though the Chinese group, headed by Jack Ma, is one of the biggest companies in the world.
At the beginning of 2018 it became the second Asian company to be worth more than $500 billion, and in early June 2019 its market cap was $392 billion.
Since 2015 Alibaba has been expanding rapidly into cloud services. Alibaba Cloud has 56 availability zones in 19 regions around the world. It is one of the world’s top three infrastructures as a service (IaaS) and is China’s largest public cloud service provider.
Yeming Wang is senior director and head of Global Key Accounts for Alibaba Cloud and runs the operation in Europe, the Middle East and Africa. He spent most of his career in Huawei, starting two decades ago as a radio-frequency (RF) engineer and leaving the company only to join Alibaba, which has made huge progress since it moved into cloud just 10 years ago. “Cloud computing revenue is growing 76% year-over-year,” says Wang.
In Q1 2019 revenue was the equivalent of $1.15 billion, “primarily driven by an increase in average spending per customer. We are also seeing significant traction and diversification of customers and revenue.” During that quarter, “we continued to use our scale to lower the pricing of products and services in content delivery networks, security, database and network infrastructure – so that we are able to pass on cost savings to our customers.”
There are “several new next-generation technologies that we have been focused on”, he adds. “These include global network solutions, which enable organisations to connect multiple regions within one network. There’s also data lake analytics (DLA), a server-less, high-performance and interactive query service that turns customers’ cloud storage data into insights with zero infrastructure setup.”
Alibaba is venturing into blockchain-as-a-service (BaaS). This “is an enterprise-level platform service that helps customers build a secure and stable environment for blockchain implementations”, says Wang.
He adds that Alibaba Cloud has a service to counter distributed denial of service (DDoS) attacks. “We offer anti-DDoS premium, which is a range of techniques to help defend against DDoS attacks, including near-source cleansing with five scrubbing centres around the globe, an overall bandwidth capacity of over 2Tbps, and thus guaranteeing businesses have access to their required bandwidth after cleansing.”
What is on Alibaba’s roadmap to become a truly global player? “Alibaba Cloud opened two availability zones in the UK in October 2018, in addition to its Frankfurt and Dubai data centres launched in 2016,” says Wang. “This expansion not only extends Alibaba Cloud’s capabilities within Europe, but also serves to highlight the provider’s ongoing commitment to the region. Alibaba Cloud’s local footprint is steadily increasing.”
This European “pair of high-performance availability zones will enable organisations in the region to accelerate the upgrade of their digital infrastructure, enabling more efficient digital transformation initiatives”, he says. “Business continuity is also a clear focus, with dual availability zones offering stronger disaster recovery capabilities.”
However, Amazon Web Services (AWS) is expanding its cloud computing operations in the Asia Pacific region, where it is now eighth in the market and has launched a data centre in Hong Kong. But will Alibaba remain the number one player in the region?
“All data centres want improved reliability, increased availability and lower capex and opex,” says Wang. “We have proven time and again that we can deliver successfully on that market requirement. It’s our achievements in China that are helping us to win new business in other territories, like EMEA.”
Alibaba has an ecosystem partner programme in the EMEA region now. Will this become a global platform anytime soon? Wang notes that in May 2019, Alibaba Cloud added nine partners to its EMEA ecosystem partner programme, which was developed to “strengthen the collaboration between Alibaba Cloud’s customers and partners in Europe, the Middle East and Africa,” he says. “Alibaba Cloud has also furthered its commitment in nurturing young talents in cloud computing and big data by partnering with French local universities.”
Beyond, the company is offering an expanding network of content delivery network (CDN) nodes and deployment regions, “including the first public cloud data centre regions in the Middle East – in Dubai – and Indonesia, a string of data centres in Asia, and a strong presence in North America, Europe and Australia”, he adds.
The focus is to build a technologically inclusive IaaS platform to focus on platform as a service (PaaS), “and we want to see our SaaS [software as a service] partners grow on the Alibaba Cloud platform”, says Wang. “We also want to embed products and solutions into consulting plans to empower customers through our partners,” he adds, listing Deloitte, KPMG, and Accenture.
“The more we offer, the more attractive Alibaba Cloud is to companies that want to work with or partner with us,” Wang says. Alibaba’s cloud CDN “is a distributed network built on top of a carrier network that solves internet congestion and speeds up access to your web applications. Currently, Alibaba Cloud has more than 2,500 nodes in more than countries across six continents.”
But how is the Alibaba Cloud management team developing the company into a more technologically inclusive platform? Is it focusing more on SaaS?
“Today, Alibaba Cloud is the third largest worldwide cloud service provider and has grown the fastest for the last three years,” he says. “We have succeeded in providing a comprehensive suite of cloud services and we have served over one million paid customers.”
For years, he says, the telecoms industry has been working to put in place the basic cloud technology infrastructure that underpins the foundation of the internet society. “Additionally, Alibaba Cloud has worked successfully with top telco companies in and beyond China to provide scalable and flexible cloud technology services with a cloud native infrastructure.”
Does Wang see that the advancement of machine learning and artificial intelligence (AI) are set to revolutionise the marketplace? “AI is such an exciting concept,” he says. “AI is not just a buzzword. It’s more profound, and should carry the additional meaning of ‘actionable insight’.”
And how is Alibaba Cloud tackling this opportunity? “We’re much more interested in applying technologies to solve real-world, complex and urgent problems. Take, for instance, actionable insights for medical professionals when it comes to identifying diseases more effectively through better image scanning and analysis.”
Are there opportunities for AI in data centres? Wang is confident: “Our latest data centres offer customers an unparalleled level of service with complete access to a range of cloud services from machine learning capabilities to predictive data analytics.”
Let’s turn to the company’s global BaaS, now available in North America, EMEA, mainland China, Hong Kong, Singapore, Japan and Australia. The offering “is part of our overall cloud business strategy, which is to provide an integrated platform for enterprises to deploy their applications and continue to grow”, says Wang.
“Blockchain is a revolutionary technology and will become a key driver for innovation as it enhances the level of trust and creates greater efficiencies across industries and borders,” he explains. The service “has already built a proven track record of enabling multi-scenario applications, for example in the public benefits system and the logistics and medical industries, based on its decentralised and distributed storage and anti-tampering features”. Alibaba had the largest number of blockchain patents in the world for the two consecutive years of 2017 and 2018, he adds.
“What we’ve seen is that the public cloud has quickly become a norm while multi-cloud allows vendors to focus on providing a ‘solution-as-a-service’ to address greater, organisation-wide pain-points rather than just siloed IT issues,” says Wang.
“What we anticipate is that as cloud infrastructure becomes a commodity, resellers and channel partners may struggle if they are only familiar with one certain cloud technology. Our suggestion is that it is imperative to gain expertise in verticals, as is local country and region insight. We think that with those value adding pieces in place, partners have a better chance to stand out from the crowded marketplace.”
Edge, cloud, network, and device synergy is central to the company’s telecoms offering, he says. “We consider cloud computing to be important for both reducing the cost of running telecoms networks and transforming the telecoms business model from product to service provider.”
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