Salesforce partners with Alibaba to penetrate Asia’s booming cloud market

Salesforce joins forces with Alibaba to open door to Chinese market

Salesforce has announced a strategic partnership with Alibaba that gives the Chinese cloud giant exclusive selling rights to Salesforce’s CRM software.

Alibaba will sell Salesforce’s cloud services to customers in mainland China, Hong Kong, Macau and Taiwan.

The partnership will also see Salesforce become the exclusive CRM product suite sold on Alibaba Cloud.

While Salesforce is one of the world’s leading cloud services companies, it has recently experienced a slump in growth.

In order to meet its ambitious target of doubling annual fiscal revenue to $28bn by 2023, the CRM provider is looking to tap into China’s booming cloud market, that is growing at twice the global rate.

According to IT analyst IDC, by 2023 China will surpass the US to become world’s largest cloud market and represent 25 percent of the global market.

Given Alibaba dominates China’s $14bn cloud market, the partnership makes stragetic sense for Salesforce’s ambitions in Asia.

“Alibaba’s advanced, secure infrastructure and knowledge of these markets will empower our global customers with a solution that meets local business needs,” Salesforce said in a blog post.

Privacy and compliance

Companies operating in China are subject to strict cyber security laws requiring data created or collected for business activities in China to be stored in mainland China. Data can only be transferred offshore upon review.

As Salesforce’s suite, including Sales Cloud, Commerce Cloud and Salesforce platform, will run on Alibaba cloud instances in China, it raises several compliance and privacy issues for multinational organisations with Salesforce users in China.

“Salesforce’s partnership with Alibaba is another example of international cloud vendors finding solutions to offer privacy-compliant software services to serve their customers in China,” said Olive Huang, research director at Gartner in a blog post.

“For multinational organisations who have Salesforce users in China, what remains important is to understand the status of privacy-compliance of the solution, the migration support from Salesforce and the available resources in China from Salesforce partner ecosystems to support the migration. Similar as GDPR, for an end user organization, vendor solution compliance doesn’t mean the job is done, it is only one of the boxes ticked.”

Neither Salesforce nor Alibaba revealed when Salesforce services would become available.