Allan Krans, cloud practice manager at Technology Business Review, has revealed in a research report why Alibaba Cloud President Simon Hu’s aim to overtake Amazon Web Services (AWS) to lead the global cloud market by 2019 will not be achieved.
Even if Alibaba doubles its revenue growth rate to nearly 200 percent over the next two years and AWS does not achieve revenue growth in 2018 and 2019, AWS will have 2x revenue than Alibaba in public cloud IaaS and PaaS revenue.
The main gain for Alibaba in the cloud market will be its growing influence among IT heads, CIOs, governments, start-ups over the next two years.
The other achievement for Alibaba is the possibility that it can secure the fourth-largest position by the end of 2019 given the current growth rates of market leaders in IaaS and PaaS.
IT spending related decision makers at enterprises are eagerly watching for IBM’s action plans and growth in Cloud market. IBM is facing slow growth at present.
The report said Alibaba’s investments and expansion in the global cloud market will benefit its peer Chinese cloud vendors such as Baidu and Tencent to more easily win international adoption.
Established in 2009 targeting the China market, Alibaba recently announced its Indonesia plans to grow its business further. Tokopedia, GTech Digital Asia, Dwidaya Tour, and Yogrt are some of the Cloud customers in Indoenesia.
Alibaba’s recent communications never specifically clarified what would be their special offerings (beyond discounts) in order to attract cloud buyers at enterprises. CXO level decision makers at enterprises want to know what Alibaba can bring to the table if they need to shift from AWS, Google or Microsoft.
Alibaba Cloud announced 30 percent discount on servers and database by March 31, 2018 to its customers in Indonesia. IT procurement managers will be happy to receive a 30 percent off on their purchases. But they will be more eager to know the difference among Alibaba, AWS, Microsoft and Google Cloud.
U.S.-based firms accounted for four of the five largest public cloud IaaS and PaaS firms in 2017.
China-based vendors – Alibaba, Baidu, Tencent and China Telecom — are rapidly expanding to capture more global opportunity in Cloud market.
As a result of its growth strategy, Alibaba achieved just less than 100 percent revenue growth in 2017. Microsoft was close to Alibaba matching that rate of growth. Alibaba still depends on China for much of its revenue. On the other hand, Microsoft depends on the U.S. market for Cloud revenue growth.
Alibaba, Baidu, Tencent and China Telecom face challenges in growing beyond their China market.
The same way, AWS, Microsoft and Google face challenges in China market due to tough regulation.
Alibaba, Baidu and Tencent are expanding their cloud businesses by more than 50 percent year-to-year – achieving better results than leading firms such as Amazon Web Services (AWS) and Microsoft.
The ability to win big clients in international markets will be an important motive for Alibaba when it starts making investment. At present, Alibaba and Baidu do not have big Cloud clients in the U.S. or European IT markets. Alibaba Cloud website says it is the official Cloud Services Partner of the International Olympic Committee.