Alibaba Group Holding Ltd (NYSE:BABA) has expanded its cloud footprint with the opening of a new data center in Australia. The new facility in Sydney adds to similar launches in Germany, Japan, and Dubai. The new data centers are part of the e-commerce giant $1 billion investment in the cloud as it steps up to challenge Amazon.com, Inc. (NASDAQ:AMZN), Alphabet Inc (NASDAQ:GOOGL) and Microsoft Corporation (NASDAQ:MSFT).
Alibaba Cloud Push
The $1 billion investment is expected to boost the company’s data center network to 14 locations as the company continues to focus more on key economic centers around the world. In a bid to take on other key players in the business, the company is promising to offer improved latency and greater access to diverse offerings touching on areas of data storage, analytics services as well as cloud security.
Alibaba has resorted to using local technology partners to come up with data centers in new markets as it looks to trim its capital investment risk. In Australia, the company will be targeting small business that is looking for affordable ways of running a number of operations on the cloud.
President of Alibaba Cloud, Simon Hu, says their main objective with the latest push is making cloud computing as the driver for the new global economy.
“Alibaba Cloud has contributed significantly to China’s technology advancement, establishing critical commerce infrastructure to enable cross-border businesses, online marketplaces, payments, logistics, cloud computing and big data to work together seamlessly,” said Mr. Hu.
Growth Prospects
While Alibaba faces an uphill task to be a major competitor to the likes of Amazon Web services, the rate at which it is growing should be a big concern to the big players. Alibaba cloud currently boasts of a client base of more than 2.3 million people and still growing. Revenues in the unit grew by 130% to highs of $224 million in the recent quarter and currently accounts for 4% of the e-commerce giant total revenues.
Paying customers on Alibaba Cloud currently stand at 651,000. The tech giant now hopes to grow the number to 1 million; a milestone it hopes will make the cloud business profitable.
Alibaba Group Holding Ltd (NYSE:BABA) stock was up by 0.81% in Monday trading session closing the day at highs of $93.76 a share.