Alibaba plans to invest $1B in cloud computing globally to further the expansion of Aliyun, its public cloud services platform. Alibaba currently operates five datacenters in Hong Kong and China and opened a data center in Silicon Valley earlier this year. The $1B investment will be used to create datacenters in the Middle East, Singapore, Japan and Europe and fund the company’s product development with respect to solutions for cloud and big data. Aliyun also announced a collaboration with Yonyou Software (Yonyou), the largest sotware vendor in China. The strategic partnership with Yonyou Software positions Aliyun to more effectively tap into the enterprise market for cloud products and services in both China and the Asia Pacific region. Meanwhile, in the U.S., Alibaba plans to take direct aim at the dominance of Amazon Web Services in the Infrastructure as a Service space as noted below by Simon Hu, the President of Aliyun:
Our goal is to overtake Amazon in four years, whether that’s in customers, technology, or worldwide scale. Amazon, Microsoft and others have already laid the groundwork for us by educating the markets about cloud in the U.S. and Europe, so we have an even better opportunity to join in the competition.
Aliyun has its work cut out for it if it plans to overtake Amazon within three to four years but its investment does beg the question of whether the larger space of cloud products and services has room for another major player. Even though a large part of Aliyun’s success rests upon the Chinese market in which it already claims a significant foothold, its $1B investment and associated plans to expand to other countries signal a deeper commitment to globalizing its product that builds upon its preliminary traction in mainland China. As such, Alibaba continues its transformation from an e-commerce vendor to a broader technology company focused on its original mission of helping businesses leverage the internet to more effectively market their products and services.