The Stack Archive News Article

Alibaba looking into European data centre expansion to push cloud growth

Fri 29 Sep 2017

Alibaba is looking at locations for a second European data centre, as it looks to expand its global presence and grow its cloud services to compete with Amazon.

The Chinese e-commerce giant is making waves in the cloud computing space. It has a dominant position in its home territory, handling millions of online transactions and hosts more than a third of Chinese websites – an enormous number, given China’s population of 1.4 billion people.

Having built up a powerful network in order to power these two functions, the company moved into cloud computing in 2009. Though currently accounting for a small proportion of the company’s total revenues, JPMorgan Chase & Co analysts believe that by 2021 cloud could account for 15% of its turnover.

Its cloud revenues grew by 126% last year, according to a Gartner report – the highest level of growth worldwide. However, with a 3% global market share, compared to AWS’ 44.2%, it is still trailing a long way behind – although it has overtaken Google’s Cloud Platform.

The company wants to push that growth further, and Europe is an almost untouched area for the Chinese firm, with only one data centre currently in use in the entire continent – a site in Frankfurt that opened in November.

Alibaba’s deputy director for international government and public affairs, Lin Luo, acknowledged the work required in Europe. “Right now, Europe is really a weak region for us, very weak. We have to figure out what is the best strategy here.”

According to Bloomberg, Luo cited London and Sweden as potential locations for a second European data centre. Speaking to government officials in Belgrade, Luo said that having a single data centre across the continent was an issue that is holding them back.

The firm operates 14 data centres worldwide, and in addition to Europe, has reportedly set its sights on further expansion into emerging markets in Southeast Asia.


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