Alibaba Cloud may overtake Amazon’s AWS in 5 years: analyst

By Ma Jingjing Source:Global Times Published: 2020/3/3 21:03:41

The logo of Alibaba Group is seen at the company's headquarters in Hangzhou, East China's Zhejiang province File photo: VCG

China's dominant cloud player Alibaba Cloud, or Aliyun, could overtake international competitor Amazon's Amazon Web Services (AWS) in five years, as industrial internet breakthroughs backed by 5G may first take place in China, an industry analyst said on Tuesday.

Since the novel coronavirus (COVID-19) outbreak, Alibaba Cloud services in China have grown rapidly, with about 200 million Chinese people working at home using the Alibaba-backed app Ding Ding and nearly 50 million students attending remote classes via the app.

As the app's traffic surged a hundredfold, Alibaba Cloud chose to expand its capacity to support 100,000 cloud servers.

Having honed its capacity during the outbreak, Alibaba Cloud is expected to continue robust growth over the next few years in consumer-oriented internet services like fintech, logistics and mobile offices, said Liu Gang, director of the Nankai Institute of Economics and chief economist at the Chinese Institute of New Generation Artificial Intelligence Development Strategies.

Alibaba Cloud reported that its revenues skyrocketed 62 percent year-on-year to reach 10.7 billion yuan ($1.54 billion) in the fourth quarter of 2019, a new milestone for the service.  During the same period, its global competitor Amazon's cloud business AWS posted revenues of $9.95 billion.

According to research and advisory firm Gartner Inc, Alibaba ranked No.3 in its share of the global public cloud IaaS (infrastructure as a service) market in 2018, accounting for 7.7 percent while Amazon accounted for 47.8 percent.

The global cloud computing market has three main players - Amazon, Microsoft's Azure and Alibaba. Amazon began offering its cloud services in 2006 and Microsoft launched Azure in 2010. Although Alibaba expanded to the cloud computing sector in 2009, it initially provided cloud services only in China.

At a forum ins Guangdong Province in December 2019, Alibaba Cloud business group president Zhang Jianfeng said the company has provided cloud services to over 3 million corporate clients worldwide, including 38 percent of Fortune 500 companies and 80 percent of high-tech companies in the Chinese mainland.

Alibaba Cloud launched ecosystem partnership programs in Europe, the Middle East and Africa in July 2018, and may disrupt Amazon's cloud businesses in those markets.

The next growth point for globally leading cloud services providers is the industrial internet, which will very likely first be used on a large scale in China, a global manufacturing center, as the country has vowed to make 5G breakthroughs for the industrial internet, Liu told the Global Times on Tuesday.

He said Alibaba Cloud could overtake Amazon in five years, when the industrial internet sees explosive growth in the Chinese market.


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