Chinese Data Center Market and Alibaba Cloud

China has a unique cyberspace context that can be difficult for foreign companies to grasp because of many complexities. Some difficulties are linked with severe control of the Internet by the government,  challenging security regulations within the country, and the lack of transparency. Foreign customers often cannot access the data from the common source and have to use a separate account for all of their operations. Despite these difficulties, Chinese companies are quite ambitious about taking over the international market. One of the most successful cases of the global expansion of Chinese cloud providers is Alibaba Cloud, the subordinate of Alibaba Group Holding Ltd., China's most prominent international e-commerce platform.

Brief Notes On History

Alibaba Cloud is the largest cloud computing company in China that offers dataspace to customers through a prepaid model. The company also provides services to customers, including big data, data customization, and e-commerce. Alibaba Cloud was created in 2009, with two first locations in Beijing and Silicon Valley. Since 2015, the company's international headquarters have been located in Singapore. The history of the Alibaba Cloud is somewhat similar to Amazon (AWS), as both companies started to support online shopping transactions of the companies' primary division, e-commerce. 

The Map Of The Cloud

As of 2020, the company’s data center operates in 63 availability zones across 21 regions. Outside of China, data center regions are located in Japan, Singapore, Australia, UAE, Malaysia, India, Indonesia, Australia, Germany, the UK, and the United States. Additionally, the company relies on edge node server clusters. It has over 2300 nods in China and over 500 nods in other locations over the world. Alibaba Cloud is a rapidly developing segment of the Alibaba Group Holding Ltd behind only e-commerce. The network of Alibaba data centers is growing at a rapid pace. In 2019, it opened its second data centers in Japan and Indonesia. With this expansion, the company doubled its capacity in these two regions. The company is expected to spend over 28 billion dollars on improving the cloud within the next several years. Currently, Alibaba Cloud is responsible for about 7 percent of Alibaba's revenue, but it will likely grow in the upcoming years.

How Does the Company Overcome The Challenges of the Chinese Market?

The top management of the Alibaba cloud has a clear understanding that they have to change the rules of the game in China for effective international growth. Luckily for everyone, the company has acquired enough resources to do just that. For now, the company focuses on creating the best conditions for foreign companies that are willing to expand their business in China. For example, in 2019, Alibaba Cloud has announced the new program for Australian companies that will help to soften their arrival to the Chinese market. The program will give Australian companies the opportunity to use their local operational software in China, an opportunity not used ever before. To meet this goal, Alibaba Cloud develops exceptional cross border products and business solutions that take the specifications of the Chinese market into consideration. Such an opportunity gives Australian businesses the benefit of visibility every step of the way, which is a rarity in Chinese business and legal climate.

Green Solutions On The Way

Peeking inside Alibaba data centers is not as easy as with some of its competitors, but one thing that is clear is that the company's data hubs are a major center of the innovation. Since 2015, the company has experimented with building innovative eco-friendly green data centers. The first one of them is located in Zhejiang, China. The company is yet to reach the zero carbon footprint many of its competitors have, though it is taking the steps in the right direction. While the environmental dedication of Alibaba might not seem that impressive compared to companies like Google and Microsoft, the company is a major innovator if considered in the context of Chinese companies that struggle with decreasing its carbon footprint.

Alibaba Data Hub Cabling

Alibaba Cloud helps its customers to create an effective connection with its data centers. Possible line types of connecting to the company's cloud include MSTP, MPLS VPN, and fiber connectivity. Just like its competitors around the world, the company heavily relies on the fiber optic cable system. Still, it offers the customers alternative ways of connection if the fiber-optic network does not work for them for any reason. As of 2020, Alibaba Cloud does not participate in major tech giant collaborations on an underwater cable connection, though this can likely be in store for the company as it continues its international market expansion.

What's Next for Alibaba On the Data Market?

The analysts predict a bright future for Alibaba Cloud despite the potential political tensions caused by the arrival of the Chinese company in the international market. Alibaba Cloud already demonstrates all signs that it will challenge the top cloud providers like Amazon Web Services (AWS) and Microsoft Azure. For now, Alibaba Cloud is taking all the right steps to become a leader in the data market. The arrival of Alibaba means that the pace of the innovation is likely to increase because of the growing competition. The company's clear leadership in the Asian market is unlikely to be challenged because of the complexities of the Chinese business environment, which gives it a clear advantage over international competitors.