Everyone knows about Amazon Web Services (AWS)—the huge cloud service aspect of the online retailer that the Department of Defense (DoD) uses. However, the “other” Amazon, Alibaba, has a cloud that’s even bigger. It took Amazon nine years to finally turn a profit on AWS, and now that $1.57 billion in first quarter sales seems to be taking down the competition with ease. However, that “competition” only encompasses rivals in the US and/or North America. Now that AWS is slated to take on the world, they’ve come across a fierce competitor: Alibaba.
Already, Amazon has scooped up an impressive 28 percent of the global market for all cloud infrastructure, and considering that Microsoft has a measly ten percent you might think that nobody can stop the e-tail giant. However, according to Synergy Research Group reports, AWS has been focusing on building data centers around the world in order to up their market share even more. Sometimes, this was done simply to keep things legal on a local level (there are various restrictions in different parts of the world), which meant appeasing Chinese regulations in order to open a Beijing-adjacent data center in 2014. Other, easier data center locations have included Singapore, Brazil and Ireland, where local competition is minimal—but China was a different beast to take down.
China Strikes Again
Alibaba has been battling Amazon since 2009, based out of China and offering a cloud computing service of its own: Aliyun. You may not have heard of it, but Aliyun has over 1.4 million customers. Like Amazon, it has also been looking to expand, according to the president of the company Sicheng Yu. While Amazon proudly says they have over one million customers globally, clearly Aliyun is still in the lead. The very first Alibaba-centric international data center opened up in Silicon Valley in order to target US-based Chinese customers.
When that data center opened, Alibaba boasted almost 23 percent of the market share for Chinese infrastructure “as a service” market in early 2014. Now, there are five big Alibaba data center areas in Southeast Asia including in Beijing, Hangzhou, Hong Kong, Shenzhen and Qingdao. Yu explains, “One of the things I’m trying to do is a global deployment,” which means “expanding the technology everywhere to be self-contained.” This could lead to global domination, regardless of the connectivity issues in some regions.
Alibaba, much like Amazon, excels at creating great partnerships. They’ve already teamed up with Intel to create personalized chips. However, where Alibaba is different is in their transparency about low-power server processor experimenting, particularly with ARM Holdings. Alibaba has publicly collaborated with Linaro—a cross-industry engineering business—in order to create software to optimize their ARM designs. Yu promises more information on their ARM development in 2016.
This processor architecture, which isn’t standard, might help Alibaba save quite a bit on utility bills by customizing chips just for its software. If this happens, it will join the ranks of Amazon, Google and Microsoft when it comes to engineering prowess. Right now, Aliyun boasts over 1,200 workers, with 80 percent of them being engineers. Plus, with less than 10 percent of China earmarked for IT spending, there’s plenty of room for growth says Yu. “The cloud IT infrastructure grows much faster, or ten times faster, than the legacy IT spending.”