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When you think of the competitors to AWS, Microsoft Azure and Google Cloud Platform come immediately to mind. But there’s another growing competitor that is coming from China: Alibaba Cloud.
Alibaba was founded in 2009, just a few years after Amazon started AWS. Alibaba focused initially on the China market, but after a $1 billion investment in 2015, Alibaba began to expand globally. It opened its first data center in the US that year and then a center in Europe in 2016.
In 2015, Simon Hu, then president of Alibaba, said that his “goal is to overtake Amazon in four years, whether that’s in customers, technology, or worldwide scale. Amazon, Microsoft and others have already laid the groundwork for us by educating the markets about cloud in the U.S. and Europe, so we have an even better opportunity to join in the competition.”
Alibaba hasn’t met that target, but it has grown considerably. Today it is the third largest global cloud provider, behind AWS and Azure. In April 2020, Alibaba said that they have plans to invest $28 billion in infrastructure over the next three years.
The business model for Amazon and Alibaba are different. Alibaba is more like Ebay in that it is a middleman for buyers and sellers while Amazon sells directly to consumers. Alibaba has been growing at a rate of 40% plus annually, compared to Amazon’s 27%.
In terms of cloud offerings, Alibaba is competitive and offers prices that tend to be cheaper than those of AWS, and some of its services, particularly in the areas of AI and database, offer more advanced and turn-key features that AWS lacks.
But Alibaba needs to contend with the fact or stigma that it’s a Chinese company which brings with it suspicion and worry of a connection with the Chinese government.