In the ever competitive data center market, Alibaba has emerged as a formidable foe. Data centers and cloud computing are the backbone to providing essential internet services on top of services like streaming on demand. Alibaba’s particular business line is known as AliCloud.
Kevin Kelly, managing partner at Benchmark, discusses markets and his options trade for Alibaba (BABA) with Julie Hyman on Bloomberg TV. Last week, Alibaba held its Cloud Computing Conference in Shanghai. Like Amazon, Alibaba is primarily an e-commerce company. Its cloud computing business grew out of the IT infrastructure it built to support its online retailing business. AliCloud will come to represent a bigger portion of the company’s overall revenue as analysts estimate it will account for 10% of sales over the next five years, double the present rate. It has to have a large and rapidly growing data center infrastructure to support its core businesses. It is leveraging that infrastructure to launch and aggressively grow public cloud services. It is choosing to use large portions of its cash flow to fund aggressive growth in capital expenditures.
Alibaba expanded into the U.S. in 2015, when it opened data centers in Silicon Valley (US West) and Virginia (US East). Today it offers a wide range of cloud computing services to customers all over the world.
While Alibaba is strongest in China, it serves international customers as well. It has six Asia Pacific data centers (Singapore, Sydney, Kuala Lumpur, Jarkata, Mubai and Tokyo), two in the US (Virginia and California), one in Frankfurt and one in Dubai. It also boasts more than 200 CDN nodes outside China, providing coverage for more than 70 countries. It has more than 2.3 million customers worldwide