Alibaba Cloud market share is increasing at a rapid rate, with the Chinese cloud service provider now the fourth biggest player globally according to one cloud ranking report. And while recent revenue reports show Alibaba Cloud making impressive gains with regard to cloud market share ownership, the Alibaba Group will have some hard fights against them if they want a piece of the global cloud pie.
The Alibaba Cloud formed over China in 2009 with the company rapidly becoming a major force in the e-commerce market domestically, with solid and sustained growth year after year. Alibaba is now the largest provider of cloud infrastructure in China and expansion outside its homeland has been rapid, with the company making major gains in several markets over the past few quarters.
Alibaba Cloud market share has grown significantly in the Asia-Pacific region and is now the second biggest cloud service provider in the region behind AWS. The company’s growth in the Asia-Pacific region has subsequently edged the Alibaba Cloud market share up the global rankings.
Alibaba Cloud surpassed Salesforce to take the fifth spot globally and overtook IBM Cloud to claim the fourth spot according to Synergy Research Group’s cloud ranking report. While Alibaba Cloud has been tipped to eventually break into the top three, the next step—overtaking Google Cloud Platform—is likely to prove difficult. Synergy Research Group’s Q2, 2018 figures show AWS has increased revenue once again and has increased its market share to 34%—more than the market share of the next four competitors combined.
While Alibaba Cloud has been tipped to eventually break into the top three, the next step—overtaking Google Cloud Platform—is likely to prove difficult. Synergy Research Group’s Q2, 2018 figures show AWS has increased revenue once again and has increased its market share to 34%—more than the market share of the next four competitors combined.
Not all market share reports place Alibaba so highly. IaaS/PaaS revenue rankings from Jeffries still have Alibaba Cloud in fifth place with $2.2 billion in annualized revenues—a 118% year-over-year growth rate—and 4% of market share. In fourth place in Jeffries’ rankings is Google Cloud Platform with annualized revenues of $2.4B, year-over-year growth of 120%, and 4% of market share. IBM Cloud is in third with 8% of market share and $4.5 billion in annualized revenues, with year-over-year growth at 19%. It should be noted that Jeffries’ figures only examine a section of the cloud market and exclude hosted private cloud and software-as-a-service.
For Alibaba Cloud market share to make significant gains, the company must increase its global footprint. While advances have been made in the United States, progress has been slow with only a handful of U.S. companies signing on to the platform.
President Trump’s America First policy has not made Alibaba’s task easy. Couple that with ongoing diplomatic tensions and an escalating trade war and Alibaba has a difficult road ahead of them. It’s no surprise then that Alibaba has scaled back its attempts to break into the United States market for now, and has instead set its sights on Europe for the time being.
The Synergy Research Group report shows Alibaba Cloud market share in the EMEA region is not yet high enough to take the company into the fifth spot, but that could well change over the coming months.
Alibaba has already made significant gains in Europe and has attracted other major European multinational firms, with its list of European clients now including Nestle, InterContinental Hotels Group, SAP, Philips, KPMG, and Schneider Electric to name a few.
Alibaba Cloud has already partnered with Vodafone Group Plc in Germany, French transport and communications company Bollore SA, and recently published a “London is Calling” web page—offering pre-launch subscribers discounts and free data transfers.
Alibaba Group announced on March 31, 2018, that end of the quarter revenue from cloud computing had increased 103% year-over-year with quarterly revenues at RMB4,385 million (US$699 million). Major new partnerships in the included China National Petroleum Corporation, Malaysia Digital Economy Corporation, The Malaysian Government, and Hong Kong airline Cathay Pacific.
Alibaba Cloud market share for cloud-infrastructure-as-a-service was 47.6% domestically in the first half of 2017, up from 42.4% in the first half of 2016. Fiscal year 2018 figures show annual revenue from cloud computing has reached RMB13,390 million (US$2,135 million).
Alibaba is investing heavily in its cloud arm—particularly in relation to machine learning and artificial intelligence—and has increased its services portfolio to over 300 offerings. A new data center has opened in Indonesia, extending the company’s reach to 18 countries, with plans to build a second data center in India in the next few years.
Figures from the first quarter of fiscal year 2018/2019 show revenue growth to be 93% higher than this time last year, with quarterly revenues of $710 million.
Alibaba is continuing to make major investments in its cloud arm and its revenue growth projections for 2019 are predicted to be at least 60 %. Additionally, its new growth initiatives are expected to drive long-term, sustainable value for its partners and customers.
Alibaba is certainly setting its sights on breaking into the top three globally, although a feat like that takes time. As the “AWS of the East” spreads globally, strong growth and increased competition are likely results.