Alibaba Cloud has reportedly hired back its founder Wang Jian, a decade on from his departure. The cloud computing unit is seen as Alibaba’s new growth engine but has recently experienced stagnant growth and faces increased competition from the cloud computing units of China’s state-run telecommunications companies.
Alibaba Cloud didn’t immediately respond to TechNode’s requests for comment.
Why it matters: Wang Jian’s return comes at a time when Alibaba’s cloud unit saw revenue growth slow significantly in recent years, going from 92.5% in 2018 to only 7.3% in 2022. Although Alibaba Cloud remains the largest cloud service provider in China and Asia, it is losing market share to rivals, such as the cloud units of Huawei and China Telecom, a state-owned telecommunication provider.
Details: Wang, an academician at the Chinese Academy of Engineering and an expert in human-computer interaction, founded Alibaba Cloud in 2009 under Jack Ma. He stepped down as the president of the tech giant’s cloud arm four years later after the unit established its own proprietary cloud computing products. He is set to “take an important role” at the company once more, SCMP reported, though the details have not been officially confirmed by Alibaba.
- Alibaba unveiled its ChatGPT alternative Tongyi Qianwen last month under the purview of its Cloud unit, with the workplace communication app DingTalk and smart speaker Tmall Genie the first consumer-facing products to use the new AI chatbot. Alibaba plans to integrate the AI service into all of its products.
- In April, Alibaba Cloud announced its biggest-ever price cuts, reducing the cost of core cloud products and services prices by up to 50%, in a bid to attract more customers amid rising competition.
- The Cloud unit is playing an increasingly prominent role in the development of Alibaba’s various businesses, providing AI capabilities through cloud computing services for their customers and internal business teams.
- In March, Wang publicly referred to the relationship between artificial intelligence and computing as like television and electricity, saying that “for technologies like ChatGPT, computing is the key.”
Context: As the first Chinese company to develop its own cloud computing tech, Alibaba has opened up a new segment for Chinese tech giants to compete in, but it’s also facing various problems in recent years. The unit suffered its “longest large-scale outage” in a decade on Dec. 18 2022. The more than 12-hour-long service breakdown affected multiple government and media websites in Hong Kong and Macao. Alibaba CEO Daniel Zhang took over the Cloud division after the incident.
- Alibaba underwent a major restructuring in March, with the firm divided into six separate business units, including the Cloud unit. The move seemingly gives each unit the chance to pursue its own IPOs.
- A decade ago, even some of the biggest companies in China tech were skeptical of Chinese tech companies developing their own cloud computing products and services. At a 2010 tech conference attended by the founders of both Baidu and Tencent, Jack Ma claimed that Alibaba would cease to exist if the company did not develop cloud computing itself. Baidu founder Robin Li took a completely different view, referring to cloud computing as “old wine in a new bottle”; Tencent founder Pony Ma echoed Li’s indifference about the technology.