In Synergy Research’s latest report, while AWS, Microsoft, and Google continue as the “Big Three” in most regions in the world, there was one surprise. Alibaba is now the fourth largest cloud provider in the world surpassing IBM, which was previously in that position.

Alibaba is the Amazon of China, a retail giant that decided to go into the cloud business. As with AWS, it has a charismatic leader in Jack Ma, and when it sets its sights on something you should never count them out.

Alibaba has actually been in the cloud business for some time—it launched a cloud division in 2009—but it really decided to jump in 2015 when it invested $1 billion to beef up its cloud division. That might seem like a modest investment given the size of the addressable cloud market, but it was enough to get them going.

At the time, Alibaba Cloud’s president Simon Hu told Reuter’s his goal was nothing less than to overtake AWS in four years. While they are a year short of that goal right now, it obviously isn’t something that’s going to happen (or ever was), but Alibaba has done well to over take the fourth biggest cloud company.

#2 with a bullet in APAC

As you might expect, while Alibaba’s worldwide ranking has moved up, it’s #2 in APAC. It isn’t all that surprising that Alibaba, a Chinese conglomerate is dominating in Asia. Perhaps more surprising is that AWS continues to be the #1 player even in Asia/Pacific, where there are a number of large Chinese cloud companies.

Alibaba has a market advantage in China of course, but it’s also taken the step of increasing its worldwide presence. Last year, it announced a $15 billion investment in more specific markets like the Internet of Things and artificial intelligence. These areas have attracted the attention of every large public cloud vendor simply because they are all data and compute intensive, and that adds up to larger fees and revenues.

With all of this growth and investment, it’s important to remember that it still has rather modest cloud revenue compared to Amazon, Microsoft, and Google. For its last quarterly report in May, the company reported $699 million in cloud revenue. When you compare that to the fact that AWS generated over $5 billion in revenue in its last quarterly report, it doesn’t feel quite as impressive.

That said, Alibaba has gained market share amazingly fast for a company that was barely registering on these reports just a couple of years ago. The fact that it has surpassed a traditional enterprise giant like IBM in such a short time, is pretty impressive and they should get some credit for that.

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Photo:  testing / Shutterstock. 

Posted by Ron Miller

Ron Miller is a freelance technology reporter and blogger. He is contributing editor at EContent Magazine and enterprise reporter at TechCrunch.

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