It looks like the major cloud players in the US are looking at tougher competition ahead as Alibaba, the Chinese ecommerce giant, expresses plans of jumping into the US cloud computing scene. This is something that they plan to accomplish by partnering up with domestic companies, effectively gaining familiarity on US soil.
Building Relevant Partnerships
The first major problem that Alibaba would have to face is their lack of local infrastructure, something that they have easily found a solution to. The Chinese giant has started building business relationships with relevant players to effectively put their forces into their place as they get ready to take on a global market. Some of the companies that Aliyun Computing, Alibaba’s cloud computing division has reportedly partnered up with so far are Singaporean telecoms giant Singtel, US data center company Equinix, and Intel, another tech giant.
Tougher Competition for Big Four
Considering the big names that they have started shaking hands with, it does seem that the big four should be getting ready to toughen up for a potential showdown. So far, the four biggest players in the US cloud computing scene are Microsoft Azure, Amazon AWS, Google, and IBM. Seeing how calculated each move that Alibaba makes is, there is no doubt at all that the new player is planning to come into the picture strong and aggressive.
This move is not at all surprising, considering the huge growth that the cloud computing market has been seeing in the past few years. In North America alone, it is expected that there will be a compound annual growth rate of 26% from 2013 all the way to 2018. And although the Chinese cloud market is expected to be worth $2 billion by 2018, its Northern American counterpart will be worth $75 billion by then. This means that now is the best time to invest in the industry for you to fully enjoy its benefits in 3 years.
Of course, the number of players in the field remain small considering the huge costs. It is a known fact that very few providers have the amount of resources needed to even attempt to enter the scene, let alone try to dominate and be at equal footing with the four giants ruling it. Alibaba’s stable footing in the Asia Pacific region proves to be a useful resource in this regard, considering that it was worth $200 billion in mid-2014 and has continued to grow since then.
At present, Amazon AWS is the leader among the players, with a market share that’s greater than the numbers of its major competitors combined. Seeing how well Alibaba is trying to position itself in the market however, Amazon could somehow experience some changes in the way it rules in terms of numbers.
Of course, in an industry like this, anything can happen. As long as the big four knows that new competition is coming, they are also preparing their own armies as they try to strengthen their defenses and secure their places on top.