Europe targeted as Alibaba's cloudy world domination plans take shape

Expansion-hungry Alibaba is set to increase the global reach of its cloudy biz Aliyun by opening a data centre in Europe, a senior hand has told El Reg.

Derek Wang, chief architect of Aliyun's international cloud business, said the company intends to announce expansion plans into both the European and South-east Asian markets this year.

Wang said the company is deciding on a base for its European data centre, and "we're currently doing research in Europe, and there are some conditions we must consider before deciding in which country to open a data centre ... such as network latency, data privacy, [resilience against] attacks and legal requirements. All these things are ongoing."

Aliyun already has a vast cloud services business, with 1.4 million direct and indirect customers.

The unit is outpacing the rest of the company in terms of growth, increasing revenue 64 per cent year-on-year, with quarter-on-quarter growth of around 80 per cent.

Alibaba's overall average growth is 45 per cent. However, the cloud unit is still relatively small, comprising $63m (£41m) in sales for the year, out of overall revenue of $2.6bn (£1.8bn).

However, Wang said he expects the cloud division to continue to surpass the growth rate of 45 per cent.

In order to thrust deeper into the global cloud market, Aliyun will first focus on selling its cloudy services to Chinese companies seeking to expand abroad. It will then focus on flogging services to foreign companies.

This month the company set up a cloud computing base in Dubai in partnership with Dubai-based holding company Meraas. The division also recently opened a data centre in Silicon Valley.

Wang said the company would pursue a similar partnership model in Europe. He said the other market requirements for opening a European data centre included picking a country with a good network coverage, cooling facilities, and appropriate legal and regulatory requirements.

Last week Alibaba's new chief executive Daniel Zhang singled out globalisation as the company's number one priority this year. ®