Alibaba CEO says cloud computing will be its main business in future

Zhang provided no growth projections nor hard revenue targets for its cloud plans, in addition to he did not mention any global rivals by name. yet the cloud business already is usually dominated by big, established giants including Amazon in addition to Microsoft.

Alibaba has been expanding the cloud business into completely new territories outside China over the past two-in addition to-a-half years. the item has opened completely new data centers across the planet, particularly in Asia in addition to Europe. the item recently opened a completely new data center from the U.K., a country where rival Amazon already incorporates a strong presence.

“Alibaba is usually investing at a tremendous rate to build up its cloud services. the item has become one of the planet’s hyperscale cloud players, catching up with Amazon, Microsoft in addition to Google,” said Martin Garner, senior vice president at CCS Insight, a U.K.-based analyst firm.

“the item is usually building out its geographic footprint around the planet, recently opening a data (center) from the UK,” he said. “the item is usually also innovating its cloud services portfolio at phenomenal speed, that has a strong push recently into Internet of Things.”

Amazon Web Services, the e-commerce firm’s cloud arm, is usually, however, larger than its Chinese rival. AWS raked in $6.68 billion in sales from the third quarter.

Amazon’s success may bode well for Alibaba: “At present cloud services in Alibaba are in investment mode, in addition to are not profitable. As their cloud services build scale they possess the potential to become a profit powerhouse for the company, just as AWS is usually at Amazon,” Garner said.

Alibaba is usually looking to cloud computing as a way to diversify its business beyond retail — much as Amazon did more than a decade ago. Meanwhile, Alibaba is usually also pushing a strategy the item calls “completely new Retail,” which is usually where the item tries to combine its online properties with brick-in addition to-mortar stores. in which includes food delivery in addition to also its own logistics network.

The company also announced plans earlier This specific year to design its own artificial intelligence chips. Those are to go into servers in which handle huge amounts of data in addition to could help Alibaba as the item tries to boost its cloud division.

“A chip is usually the core of the computing power. So if you want to plug AI into the business … the item’s all about computing power … in order in which’s why I think we have to spend time on chips,” Zhang told CNBC.

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