Alibaba Enters U.S. Cloud Computing Market

Alibaba Enters U.S. Cloud Computing MarketChinese online retailer Alibaba’s cloud-computing subsidiary Aliyun will begin marketing its services to U.S. customers today. This morning, in a post on its news site Alizila, Alibaba announced the opening of a data center in Silicon Valley. The move marks Alibaba’s first overseas expansion.

Aliyun is China’s largest cloud-computing service provider, with over 1.4  million customers, and data centers in Beijing, Hangzhou, Quingdau, Hong Kong and Shenzen. The company launched in 2009 with commercial cloud service offerings such as data storage and on-demand network bandwidth.

At launch, the Silicon Valley data center is offering several services, including a “virtual server”, elastic-computing service.

Though this is Aliyun first expansion on foreign ground, the company will be targeting familiar territory at first. In a statement released earlier today, Aliyun Vice President Ethan Sichen Yu said that “Aliyun hopes to meet the needs of Chinese enterprises in the United States.”

“For the time being we are just testing the water, Yu Said. “We know what Chinese clients need, and now it’s time for us to learn what U.S. clients need.”

Despite their selective targeting, Aliyun’s U.S. launch puts them in direct competition with cloud-computing market leaders Amazon, Microsoft, and Google for the first time—with a data center in their collective backyard.

Yu acknowledged that “the market is quite crowded in the U.S.,” but said that Aliyun offers “unique value.” Yu noted that Aliyun has the advantage of being one of the only companies selling cloud services in both the U.S. and China–an attractive feature for multinational companies.

According to a 2014 Forbes survey, 75% of companies questioned said they use some kind of cloud computing service. The same survey claims that the cloud-computing industry was worth an estimated $140 Billion in 2014.

Jeff Edwards
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