Alibaba Is Expanding Its Cloud Services To The U.S. To Give Amazon New Competition

Alibaba, the Chinese commerce firm which held the largest IPO in history last year, is bringing its cloud computing services to the U.S. after announcing a data center in Silicon Valley.

The base — the location of which Alibaba isn’t revealing for security reasons — is the first for its Aliyun division outside of China, where it claims 1.4 million cloud services customers. The company has four data centers in China and one in Hong Kong, and it plans to expand that reach into Europe and Southeast Asia before the end of the year.

Amazon Web Services (AWS), Google, and Microsoft are among the dominant cloud players in the U.S. and Aliyun will offer a number of similar services. That includes a virtual serve, load-balancing for companies running websites, and a data processing and storage cloud. There is also a data security service that guards against DDoS attacks — YunDun — while Aliyun will provide large-scale data storage in the future.

Aliyun has not revealed specific prices at this point, other than that its services will be “cost competitive”. It added that it will initially target Chinese companies with business interests in the U.S., but plans to ramp up its appeal to international companies in the second half of this year.

The expansion is significant for being Aliyun’s first overseas, but the company played down its initial foray into the U.S. market.

“For the time being, we are just testing the water,” Sicheng Yu, Aliyun VP and head of international, said in a statement. “We know well what Chinese clients need, and now it’s time for us to learn what U.S. clients need.”

One area where Aliyun may have an edge over the competition is with U.S. companies that are looking for similar services in China. AWS has operated a limited beta service in China since last year, but Aliyun has wider scale there. For example, the company cited its ability to keep Alibaba’s services online during 11/11, China’s largest online shopping event. Last year, the group processed 80,000 deals per second at peak, with a total of $9.3 billion in product sold over the day.