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Alibaba Revenue Reaches Over $2B in Cloud Infrastructure Market

Alibaba Revenue in Cloud Infrastructure Market

When Alibaba entered the cloud infrastructure market in earnest in 2015 it had ambitious goals, and it’s been growing steadily. Today, the Chinese e-commerce giant announced quarterly cloud revenue of $2.194 billion. There upon number, it’s passed IBM’s $1.65 billion revenue result (according to Synergy Research market share numbers), a big milestone.

But while $2 billion may be a large figure, it’s one worth keeping in perspective. for instance , Amazon announced $11.6 billion in cloud infrastructure revenue for its most up-to-date quarter, while Microsoft’s Azure came in second place with $5.9 billion.

Google Cloud has held onto third place, because it has for as long as we’ve been covering the cloud infrastructure market. In its most up-to-date numbers, Synergy pegged Google at 9% market share, or approximately $2.9 billion in revenue.

While Alibaba revenue remains a good bit behind Google, today’s numbers puts the corporate firmly in fourth place now, well before IBM. It’s doubtful it could catch Google anytime soon, especially because the company has become more focused under CEO Thomas Kurian, but it’s still fairly remarkable that it managed to pass IBM, a stalwart of enterprise computing for many years, as a relative newcomer to the space.

Alibaba has a lot in common with Amazon. Both are eCommerce big player. Both have cloud computing arms. Alibaba, however, came much later to the cloud computing side of the house, Launching in 2009, but really only beginning to take it seriously in 2015.

At the time, cloud division president Simon Hu boasted to Reuters that Alibaba would overtake Amazon in the cloud infrastructure market within 4 years. “Our goal is to overtake Amazon in four years, whether that’s in customer, technology, or worldwide scale,” he said at the time.

The 60% growth represented a small increase from the previous quarter’s 59%, but basically means it held steady, something that’s tough to try to to as a corporation reaches a particular revenue plateau. In its earnings call today, Daniel Zhang, chairman and CEO at Alibaba Group, said that in China, which remains the company’s primary market, digital transformation driven by the pandemic was a primary think about keeping growth steady.

“Cloud infrastructure may be a fast-growing business. If you check out our revenue breakdown, obviously, cloud computing is enjoying a reallyin no time growth. And what we see is that each one the industries are within the process of digital transformation. And moving to the cloud may be a vital step for the industries,” Zhang said within the call.

He believes eventually that the majority business are going to be wiped out the cloud, and therefore the growth could continue for the medium term, as there are still many companies that haven’t made the switch yet, but will do so over time.

John Dinsdale, an analyst at Synergy Research, says that while China remains its primary market, the corporate does have a presence outside the country too, and may afford to play the long game in terms of the present geopolitical situation with trade tensions between the U.S. and China.

“Alibaba has already made some strides outside of China and Hong Kong . While the size is quite small compared with its Chinese operations, Alibaba has established a knowledge center and cloud presence during a range of nations , including six more APAC countries, U.S., U.K. and UAE. Among these, it’s the market leader in both Indonesia and Malaysia,” Dinsdale told TechCrunch.

In its most up-to-date data released a few of weeks ago, before today’s numbers, Synergy broke down the market this way: “Amazon 33%, Microsoft 18%, Google 9%, Alibaba 5%, IBM 5%, Salesforce 3%, Tencent 2%, Oracle 2%, NTT 1%, SAP 1% – to the closest percentage point.”