Alibaba Pumps £640m Into Aliyun To Take On AWS

Chinese e-commerce giant Alibaba is planning a $1bn push into the cloud, taking on Amazon by expanding its cloud computing unit Aliyun into worldwide markets.

The company’s target markets will be the Middle East, Singapore, Japan and Europe and the funding will boost a new set of cloud services Aliyun announced last week, in addition to a Data Protection Pact that will make Aliyun’s cloud more attractive to markets where security needs to be protected better. The agency additionally plans to strike enterprise partnerships with telecom and enterprise know-how suppliers in these areas.

Amazon shares soared final week after the… The two companies will collaborate in cloud computing, Big Data, digital marketing and e-commerce, Alibaba said.

Daniel Zhang, CEO of Alibaba Group, said: “This additional $1 billion investment is just the beginning; our hope is for Aliyun to continually empower customers and partners with new capabilities, and help companies upgrade their basic infrastructure”. The company says that as of the end of June 2014, 1.4 million customers were using Aliyun services directly or through independent software vendors.

Aliyun President Simon Hu said in an interview with Reuters that the cloud division had accumulated sufficient technological maturity over its first six years, to look beyond Chinese shorelines and grab marketshare from global cloud players such as Amazon Web Services, Microsoft, and IBM.

Alibaba on Wednesday also announced it will pursue “strategic collaboration” with a Chinese software company, Yonyou, for cloud computing, big data and other areas, it said. Amazon now holds 28 percent of the global cloud market, followed by Microsoft, with 10 percent, and IBM, with 7 percent.

There’s a reason for Amazon’s attention to its Prime customer: According to Consumer Intelligence Research Partners, a Prime customer spends an average of $1,100 annually compared to the $700 average of non-Prime members. Currently, Aliyun has data centers in China, Hong Kong, and Silicon Valley.