Alibaba continues to put its chips into the cloud after it announced the opening of four new data centers across the world. A new facility in the Middle East (Dubai) went online today, while further locations in Australia, Japan and Germany are scheduled to open soon.
Once online, these new locations will take Alicloud, the company’s fast-growing competitor to Amazon’s AWS and Microsoft Azure, to 14 data centers worldwide. Already, it has two such facilities on U.S. soil, having put aside $1 billion in financing for this cloud services push.
Alicloud, which is known as Aliyun, is Alibaba’s fastest growing business unit, having reported six successive quarters of triple digit growth. The cloud business pulled in revenue of RMB 1.5 billion ($224 million) in the last quarter, up 130 percent year-on-year. It isn’t profitable at this point, however, having posted a loss of RMB 57 million ($8 million), but thats a significant improvement on a RMB 386 million ($56 million in today’s rate) reverse from last year.
Alibaba claims that its cloud services already power over one-third of websites in China, which is where the bulk of Alicloud’s 651,000 paying customers are based. The firm is keen to push its services overseas, hence this major data center expansion.
While its cloud-based services continues to grow strongly, the business only accounts for four percent of Alibaba’s total revenue. That’s up from three percent a year ago, but the company sees much scope for development. It also believes that there will be synergies to expanding Alicloud globally which its other businesses, including e-commerce, can tap into.
The firm is only just getting started, and it is up against some formidable rivals.
AWS, the king of the jungle, brought in $3.23 billion in revenue during Amazon’s most recent quarter of business — up from $2.09 billion in the same period last year. Microsoft’s cloud business is another stellar performer that is some way ahead. Growth of 116 percent year-on-year pushed Microsoft’s total cloud business, which includes its lucractive Office and CRM businesses, to revenue of $13 billion in the last quarter. That, in turn, took the Redmond-based company’s stock to an all-time high. Google is recognized as the third-largest cloud player, but it does not disclose revenues for its business.