Alibaba Group Holding Ltd setting up new cloud data centre in Singapore

Alibaba Group Holding Ltd setting up new cloud data centre in Singapore
By Charliepug (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Chinese e-commerce giant Alibaba announced Wednesday that it is setting up a new data center in Singapore. What’s more, Singapore will also become the international headquarters of Alibaba’s cloud computing arm Aliyun. The move is aimed at strengthening the Hangzhou-based company’s cloud operations.

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Alibaba betting big on cloud

Aliyun aims to surpass Amazon Web Services (AWS) in terms of technology, customers and worldwide scale in the next four years. Aliyun VP Ethan Yu told CNBC that the new facility in Singapore was a “strategic center” that would give it an edge over biggies like Amazon, Microsoft and Google. According to Synergy Research Group, Amazon dominates global cloud market with 28% market share, followed by Microsoft with 10%, and IBM with 7%.

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Alibaba sees cloud computing as an important new revenue stream. In the quarter ending June 2015, its cloud revenues skyrocketed 106% to $78 million. Alibaba has 1.8 million cloud computing customers, including many top Chinese firms and public agencies. The Singapore facility will become operational in September. It will be Alibaba’s second overseas data center after the company opened its first facility in Silicon Valley in March.

Alibaba’s Singapore facility allows customers to pre-order services

The Singapore data center will provide a range of cloud services to companies operating in Southeast Asia. Aliyun will initially focus on Chinese businesses operating in Southeast Asia. Although the new data center won’t open until next month, Aliyun has started accepting pre-orders for “elastic” cloud services and computer resources such as storage, processing power, and network bandwidth.

In June, Alibaba partnered with Equinix, Intel, SingTel and others to use their existing data centers to push its own cloud services. Alibaba recently announced that it would invest $1 billion in its cloud unit over the next three years. The investment is aimed at expanding the company’s offerings and setting up data centers in Singapore, Europe, Japan, and the Middle East.

Yu told CNBC that the company was also building a new portal to serve the different payment and language needs of its clients in the economically and culturally-diverse Southeast Asia.

Alibaba shares fell 0.10% to $73.76 in pre-market trading Wednesday.

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