Alibaba Cloud, the cloud computing business of the giant e-commerce Alibaba Group, has quietly announced that it has already doubled the capacity of its Hong Kong-based data center in order to meet the increasing demand in the Asia-Pacific region.
Besides that, the company also wants to meet the demand of disaster recovery cloud services, data storage and analytics, middleware and cloud security services on the continent.
The cloud market in the region is increasing due to the trend of organizations pursuing digital business where many of them are shifting away from legacy IT services to cloud-based services. And Alibaba's expansion in Hong Kong is primarily meant to serve a range of customers in the financial services, retail, hospitality and media.
This, the company said, is part of its goal to eventually expand into providing cloud services to all over the world.
In a December 2016, Alibaba Cloud reported more than 2.3 million customers worldwide generating $254 million revenue to the company. While this was a 115 percent year-on-year growth, it was still dwarfed by revenues reported by Amazon Web Services (AWS) and Microsoft Azure.
Alibaba in doubling the capacity of its cloud in Hong Kong aims to grab a bigger chunk out of those two competitors.
"Since our entry into Hong Kong in 2014, Alibaba Cloud has become one of the largest public cloud providers in the market in less than two years," said Ethan Yu, VP of Alibaba Group and general manager of Alibaba Cloud Global. "More companies have come to realize the importance of changing their traditional IT mind-set to embrace the new data technology."
According to IDC, Alibaba Cloud ranks amongst the top five cloud infrastructure services providers in the world. And according to Canalys, it's the fifth in terms of worldwide cloud sales.
AWS continued to dominate the market with a 33.8 percent global market share. Microsoft, Google and IBM together, accounted for 30.8 percent of the market. Alibaba and Oracle were making up 2.4 percent and 1.7 percent respectively.
In addition to Hong Kong, Alibaba is operating in 14 global economics centers, including in the mainland China, Singapore and also in the U.S.. In 2016, the company has launched new data centers in Japan, Germany, the Middle East and Australia.
While the potential of expansion is already on Alibaba's side, one significant challenge for the company is the ongoing censorship and restriction of the internet in its largest market, China. Many foreign companies are reluctant to store information on Chinese-hosted servers.
Furthermore, China also has the tendency towards snooping in addition to the possibilities of corporate espionage.