Interview Synopsis

Alibaba Cloud development strategies & H1 2020 updates

  • Multi Asset
  • TMT
  • Greater China

Alibaba Cloud is the market leader for cloud services in China, and the company has posted a strong performance this year with the coronavirus pandemic boosting demand for its technologies. In order to learn more about the company’s future direction and industry dynamics, Third Bridge Forum spoke to a former cloud expert from Alibaba Cloud.

What’s the forecast for China’s public, private and hybrid cloud market?

The specialist first outlined the size and growth rate of China’s public and private cloud market, as well as noting the main discussion topics for the industry at present. These include hybrid cloud strategy, cloud native computing and cloud applications in AI, such as intelligent speech recognition.

Alibaba, Tencent and Huawei together make up three-quarters of the market, with Alibaba alone taking about half of this share. Amazon Web Services, Microsoft and Baidu are other notable players. Although smaller companies operate in the cloud segment, the future for these doesn’t look bright: “I think China’s public cloud market will become increasingly concentrated in the future, and the room for small players to survive will be squeezed further.”

Turning to Alibaba’s competitive advantages, the cloud expert highlighted the fact that the company developed its Aspara Stack internally, meaning that more rapid software iterations can be deployed. Other strengths include its client services and understanding of customers’ business needs.

In April this year, Alibaba announced that it would invest RMB 200bn (USD 28bn) developing six key segments over the next three years. As well as focusing on R&D for basic chips and AI chips, Alibaba aims to build 10 more super data centres over the next five years – which each usually house about 200,000 servers, according to the Interview.

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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