We Already Follow the Sun: Alibaba Cloud’s Chief Warns Competitors
Alibaba Cloud was launched in 2009 in Mainland China and accounts today to more than 47% of the national market share. The giant of the giants has, however, not wanted to miss the international boat and set sail in 2015 into expanding its footprint beyond Chinese borders. Alibaba Cloud, Alibaba Group’s cloud business arm, counts today with 18 international regions and 43 availability zones outside Mainland China.
Speaking to Data Economy’s João Marques Lima, Yeming Wang, GM for Alibaba Cloud EMEA, says the company is “very proud to say that today it already follows the sun, from a data center coverage point of view”.
With the international business growing more than 100% in the last three years alone, Alibaba Cloud promises it’s here to stay. We find out more.
Are you trying to catch up with other public clouds like AWS or Google, or are you aiming to be bigger?
Yeming Wang, GM for Alibaba Cloud EMEA
For Alibaba Cloud we see two sides. First, the Chinese market, where we developed early. Today, regarding our Chinese product and solutions, we can say it is one of the leaders and in our system we have more than 160 products.
When you compare the different providers regarding the products or features, Alibaba is one of the leading companies. For the international market, we are trying to identify several verticals in order to excel in some of the verticals.
It is too early to say we want to compete outside of China with AWS or anybody else, because we have three years [of being active in the market], others have maybe more than ten years. But we want to get excellence in some of the verticals. Especially those verticals where the Alibaba Group is very specialized in, such as retail, fintech or media.
Are you saying you are still learning the ropes of the international market?
On one side we are developing the business [China Mainland], on the other side we want to learn about the local market. Learn especially from partners and clients about what they need. There are two sides at the same time.
From the business and development point of view, we see a lot of opportunities and good initiatives for Alibaba outside of China. But first, we will be in China, because China today has become an attractive market for a lot of global players, because today the technology makes it possible even for SMEs to go into China.
Today, China with the open policies and especially with Xi Jinping’s government is driving a lot of interest for foreign companies to develop their business in China and at Alibaba, we want to tackle this opportunity, to try to serve those companies or those players in order to help them build their business in China or in Asia.
There are two initiatives from the Chinese government. One is the One Belt, One Road, but this is more about China going outside, and the other side is China wanting to increase the imports. We see a very exciting momentum to help more European companies to do business in China. Secondly, multi clouds.
Multi clouds will be a very big opportunity and initiative. At Alibaba, we are also investing a lot in migration tools, different products. And thirdly, we believe there are a lot of opportunities around digital transformation.
AI or big data are already digital transformation, it is not anymore an IT transformation, it is a Data Technology transformation, instead of IT.
In the past, we talked about digital transformation for a long time, for more than ten years, but in the past it was all down to IT, but IT alone is a call center, it is about connection, about information.
Today is more about big data, this is facilitating your business, not only cost wise, but also increases your revenue. Alibaba is investing a lot on how to match the data, how to provide the tooling or machine for them to implement the big data and AI.
How do you go around some of the uncertainty some customers might have with storing their data with a Chinese provider?
At Alibaba Group we are managing more than 600 million consumers within the ecosystem. This year our revenue will be over $500bn. All these users are mission critical, because they are doing shopping or trading globally, not only in China.
Internally, Alibaba always treats the data in two parts: first is about the technology, you need to have the best technology for security. Every day, Alibaba’s applications or website has the highest amount of attacks.
In the Alibaba Group, we have a very strong security committee, and we leverage this team to develop Alibaba Cloud’s security capabilities. Alibaba Cloud capabilities don’t come from the cloud business arm only, it comes from the Alibaba Group security capabilities.
The other side is about compliance. In China, even internally, we treat this with six categories of different data within the Alibaba Group and different categories have very strict limits regarding which information can be released up to which level.
The customer data is the most critical one, and even Alibaba internally, if Alibaba Cloud wants to get the data from an ecommerce you cannot. Outside of China, with the Cloud business we do it differently.
First, we apply different standards. We already apply global or regional different standards, from Singapore, the US or Europe, and the most recent one was Germany’s C5 extension. And of course, GDPR.
How was the journey like for Alibaba in regards to the GDPR?
When you design your product, you have to consider all the requirements into the whole process, from R&D to the production to the final roll out and so on. For every company, [GDPR] will bring a lot of effort with it for them to really fulfil the GDPR requirements.
We respect these requirements and we have a dedicated team who are working with our external supplier, also a partner, to deliver this.
Did GDPR make you invest more in Europe, including building a data center or outsourcing more space?
No. Two years ago we launched a program called “Two Centre”. For Chinese clients, the data is managed from Hangzhou [where Alibaba’s HQ are located], but outside of China we manage it from Singapore.
This is not there because of GDPR, this is there from the very beginning. This is trying to give more confidence and transparency to the global users.
What is the plan for expanding in Europe?
In EMEA we have three data centers, two in Frankfurt which covers most of the European region, and the other one is in Dubai to cover the Middle East region.
We are planning an additional data center in Europe, but we will only disclose where in a couple of months.
What is the client base like in Europe?
There are two types of clients. The first type of client are Chinese clients that are coming into Europe. We see more and more Chinese companies coming into Europe. In China they have already been Alibaba’s clients, and globally they want to have only one account to manage their global business. Now we are also developing local clients.
Not only local clients going to China or Asia, but also local clients in local markets, with some not even interested in going to China. We are also developing some of the clients, especially in the media, ecommerce and fintech sector.
When did this shift of local clients, especially the ones not interested in going to China, started?
Since we have the local data center, mostly since last year. Our first data center was opened in November 2016. After that we started to build up on local partners, clients and last year especially we tried to focus also on some of the verticals which are less sensitive. Other sectors, if you talk about government, for example, we believe it is too early.
This needs some time and more education. It is not because it is a Chinese cloud, or an American cloud, those clients, generally, are slower. They even try to think on-premises first and then cloud, maybe private cloud first and then public cloud. They need to evaluate for quite a long time.
Is one of your ultimate goals to get a European government to host with you?
We don’t have this kind of goal at this moment, but we will see when the time is right. When they have enough trust on the capability.
If Jack Ma called you today and told you “go and build me data centers in Europe” which destinations would you choose?
From a market size point of view, we see today West Europe, with the UK, Germany and France and the Nordic. These four are the key markets today.