Alibaba Group Holding Ltd (NYSE:BABA) Teams Up With Softbank for A Cloud Venture in Japan

Carol Harper
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Alibaba Group Holding Ltd (NYSE:BABA) Teams Up With Softbank for A Cloud Venture in Japan

Alibaba Group Holding Ltd (NYSE:BABA) is expanding its cloud-computing footprint into Japan as it continues to pursue new opportunities for growth. The e-commerce giant has teamed up with its largest shareholder Softbank for the formation of a joint venture that will pursue new cloud clients in the country.

Alibaba-Softbank Cloud Venture

SB Cloud Open is the name of the new joint venture that will open a new data center for handling a wide array of cloud services in Japan. Alibaba will provide data storage and processing services as part of an agreement reached on the new venture.

The venture will target startups, as well as global organizations as the race for customers on the global scene, heats up. According to agreement terms, Alibaba Group Holding Ltd (NYSE:BABA) will have a 40% stake in the Joint venture with Softbank controlling the remaining 60%. Financial terms of the deal remain under wraps.

Alibaba plans to use the joint venture to rival Amazon.com, Inc. (NASDAQ:AMZN)’s dominance of the cloud business. The e-commerce giant has been making grounds on this front, revenue on its cloud unit having more than tripled to $153 million in the first three months of the year.

Expanding Cloud Footprint

Given that the cloud business presents a $120 billion global market opportunity, Alibaba Group Holding Ltd (NYSE:BABA) hopes to generate more than $1 billion in revenue by 2018. Its partnership with Softbank comes months after a similar deal with South Korea’s SK Holdings.

Teaming up with global brands in the effort of expanding cloud offerings into new countries has been Alibaba big play in the recent past. The e-commerce giant has already teamed up with Accenture Plc to target more cloud clients in China and Southeast Asia. A partnership with German’s SAP SE is also in the works.

Alibaba Group Holding Ltd (NYSE:BABA) is planning to open new data centers in emerging countries to support its ever-growing cloud business. Currently, it has such facilities in Singapore and the US but expanding into Europe before the end of the year is a top priority.