Aliyun, a new threat to Amazon and Microsoft in the future

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When it comes to Alibaba, people often mention online shopping, but in fact, the e-commerce business of this corporation is so much broader. One of the powerfully growing segments of Alibaba is the cloud computing service.

Alibaba

In 2008, Alibaba Group established Aliyun cloud computing array (“yun” in Chinese means “cloud”). Initially, Aliyun was established to primarily handle the access volume and the huge amount of data from Alipay payment platform. However, since 2010, Aliyun has started adding cloud service to increase revenue. Today, Aliyun has provided a full service for cloud computing segment, including data storage and supply, resource retrieval and allocation, large-scale cloud services to serve major corporations or governments.

The cloud computing industry has been one of the sharply booming businesses recently. In 2008, the total value of this business was estimated 46 billion dollars, but by the end of 2014, this figure rose to more than 150 billion dollars.

In the Chinese market, many experts believed that cloud computing was still a new array and predicted annual growth rate of this sector would reach 33.2% during 2015-2018.

Up to June 2014, Aliyun served for more than 1,400,000 customers from many different sectors, such as companies developing mobile applications, games, internet, digital entertainment, consumer electronic devices and even government agencies. According to Alibaba’s financial report in the fourth quarter of 2014, 9-month last year revenue from cloud computing reached 147 million, an increase of 58% compared to the same period of 2013. The fiscal year 2015 report showed the revenue of Alibaba’s cloud computing service was 204 million and Sun Trust has predicted this figure could reach $ 393 million for fiscal year 2016 and $ 1.2 billion for 2018.

Although the current turnover of cloud computing accounts for less than 2% of Alibaba’s total sales, many experts predict that this percentage could rise to 10% in the next 5 years.

On July 2015, Alibaba announced an additional investment of $ 1 billion in Aliyun to expand its data center, not only in the Chinese mainland market but also in Hong Kong, the US and worldwide. This investment also shows Alibaba’s ambitions in the field of information processing when the online retail market in China is expected to increase to 10 CNY trillion (equivalent to 1.5 trillion US dollars) on 2020 (according to data from Bain & Co. company).

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