Alibaba Cloud is attempting to attract new UK customers with a range of promotions to accompany the opening of its London data center. Undoubtedly many price-conscious businesses will take advantage of the promotions, increasing Alibaba cloud revenue in the short-term...but will it last?
Recently, a new “London is Calling” page appeared on the Alibaba Cloud website, offering price discounts and free data transfers for “London Region Early Birds”, with the promise of multiple free trials once its new data center has opened. Some of the offers are very tempting and it is likely price-conscious businesses will take advantage of them in order to test out the Alibaba service.
What isn’t clear is how many customers will remain loyal to Alibaba Cloud once the honeymoon period is over. Despite the “Amazon of China” adding 316 new products to its portfolio in the fourth quarter of last year, Alibaba Cloud is often regarded as a stripped-down version of AWS and has been compared to a budget airline as long as you don´t get the full range of frills, but prices can be much lower.
Although the likely recipients of Alibaba Cloud´s promotional offers will be SMBs, the company has its sights set high in Europe. Alibaba's website shows that some large European companies such as Nestle, InterContinental Hotels Group, KPMG, Philips, SAP, and Schneider Electric are already signed up as customers, and one of the company’s unique selling points is that its cloud service run seamlessly both outside and inside of China—supporting companies keen to tap into Asia´s largest commercial market.
Another one of Alibaba’s unique selling points is the capacity of its infrastructure. Last year, during China’s “Single’s Day Festival”, the Alibaba shopping platform processed 325,000 orders per second without incident despite unprecedented peak traffic spikes. At the same time, the Alibaba Cloud platform was supporting its search engine, gathering analytics, processing mobile payments, and much more. It is certainly ready to cater for more large organizations, but will they come?
The European cloud computing market may not be the size of its North American counterpart, but it is growing rapidly, and Yeming Wang—General Manager of Alibaba Cloud for Europe, the Middle East and Africa (EMEA)—believes the company has opportunities to enhance Alibaba cloud revenue in four key areas: the development of digital transformation in targeted vertical industries, supporting talent development, advancing technology innovation, and enhancing marketplaces.
Speaking at the launch of the EMEA Ecosystem Partner Program in Paris last month, Wang said: “Our goal in EMEA is to bring powerful and elastic cloud services to our customers and create a well-connected, comprehensive ecosystem with our partners to accelerate cloud technology development. We aim to empower our customers as they undergo their own digital transformation which will greatly improve their business efficiency and ability to provide a positive experience for their customers.”
Unlike some cloud service providers, Alibaba Cloud revenue is identified as a separate item in the company’s group accounts. However, it is presented as a total rather than geographically, and therefore it will be difficult to calculate Alibaba cloud revenue growth solely in Europe. The global expectation is for year-on-year cloud revenue to increase by 100 percent from $2.135 billion to $4.27 billion in 2018/19—which would move the company to within a fortune cookie of Google Cloud.
Despite the company’s significant investment in research and development, Alibaba Cloud revenue will likely continue to grow but at a much-reduced pace. Whether the opening of its London data center contributes to the long-term growth of Alibaba cloud revenue, we shall have to wait and see. But, in the short-term, it is certainly worthwhile for businesses in the UK to investigate the company’s “London Region Early Birds” promotions.
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