Alibaba to run its entire business on the cloud

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Zhang Jianfeng, president of Alibaba Cloud and CTO of Alibaba Group. (Image credit: TechNode/Nicole Jao)

Alibaba Cloud, the cloud computing arm of Chinese e-commerce giant Alibaba, held its 2019 Cloud Summit today in Beijing as it celebrates its 10-year anniversary.

Alibaba Cloud is undergoing a strategic upgrade, said Zhang Jianfeng, president of Alibaba Cloud and CTO of Alibaba Group, as he addressed a crowded room filled with thousands of participants and industry partners at the China National Convention Center.

“Currently, 60-70% of Alibaba’s businesses run on Alibaba’s public cloud platform,” said Zhang. “Within a year or two from now, we expect 100% of Alibaba’s businesses to run on the public cloud.”

The “All-in-Cloud” era is coming, industries are increasingly running on cloud, Zhang said citing data that indicate over 84% of businesses in China show willingness to embrace cloud technology.

The company hoped to become a core component of the Alibaba’s business operation and assist more enterprises to thrive in the digital age, said Zhang. Alibaba Cloud is not trying to be a SaaS provider, instead, it wants to provide a platform for its SaaS partners to get businesses onboard more readily and help them better adapt to the digital age.

Zhang noted Alibaba’ s e-commerce business is an important advantage for developing its cloud technology, providing necessary stress tests for handling massive amounts of data in real-world scenarios.

Additionally, the adoption of cloud technology is expected to become more immersive in China, especially in the traditional sectors, said Zhang. The company expects the demand for such service to become more apparent as more enterprises seek to derive deeper business insights and make data-driven decisions.

Alibaba will continue to invest in research and development through the DAMO Academy, the company’s scientific research institute, to boost the development of cloud technology, products, and services, according to Zhang.

Although cloud is one of the hottest buzzwords in technology, Alibaba’s cloud business is still some time away from reaching the “inflection point,” Lancelot Guo, VP of Alibaba Group, said in an interview after the session. Guo is in charge of Alibaba Cloud’s business strategy, marketing operations intelligence and corporate investments.

Lancelot Guo, vice president of Alibaba Group. (Image credit: TechNode/Nicole Jao)

Guo noted that for most of the enterprises that the Alibaba Cloud serves today, cloud technology takes only a minor part in their overall digitization strategy. Alibaba Cloud’s mission, he says, is to lower price and barrier for adoption and increase prevalence for enterprises.

Moreover, even though Alibaba Cloud is now serving millions of small and medium-sized enterprises and individual developers there is still a big chunk of customers that they have yet to capture, he said.

Industries and enterprises today operate in a somewhat borderless world, Guo said many enterprises they serve today have the ambition to expand overseas, and many businesses overseas are eager to enter the Chinese market.

Alibaba Cloud’s strategy for overseas expansion is to follow the supply chain of businesses in China, in other words, it will focus on Hong Kong, the import and export hub for China and Southeast Asia, where production is shifting to—similar to Alibaba e-commerce business strategy.

Established in 2009, Alibaba’s cloud computing arm is one of the largest provider of public cloud services in China. Cloud computing is becoming one of Alibaba’s main business focuses in the past few years. Its public cloud platform and cloud computing technology now underpin the entire Alibaba ecosystem ranging from e-commerce and payments to logistics and supply chain management, according to a company statement.

At the summit, Alibaba Cloud announced a suite of new products including a super-computing server instance “X-dragon Super-Computing Cluster” that can support scenarios such as autonomous driving, machine interpretation, and natural language processing. The company also launched a SaaS Accelerator that allows enterprises and developers to build and launch SaaS applications on the cloud.