Alibaba Cloud
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Alibaba Cloud revenue reaches $1.5B for the quarter on 62% growth rate
Alibaba issued its latest earnings report yesterday, and the Chinese eCommerce giant reported that cloud revenue grew 62 percent to $1.5 billion U.S., crossing the RMB10 billion revenue threshold for the first time.
Alibaba also announced that it had completed its migration to its own public cloud in the most recent quarter, a significant milestone because the company can point to its own operations as a reference to potential customers, a point that Daniel Zhang, Alibaba executive chairman and CEO, made in the company’s post-earnings call with analysts.
“We believe the migration of Alibaba’s core e-commerce system to the public cloud is a watershed event. Not only will we ourselves enjoy greater operating efficiency, but we believe, it will also encourage others to adopt our public cloud infrastructure,” Zhang said in the call.
It’s worth noting that the company also warned that the Coronavirus gripping China could have impact on the company’s retail business this year, but it didn’t mention the cloud portion specifically.
Yesterday’s revenue report puts Alibaba on a $6 billion U.S. run rate, good for fourth place in the cloud infrastructure market share race, but well behind the market leaders. In the most recent earnings reports, Google reported $2.5 billion in revenue, Microsoft reported $12.5 billion in combined software and infrastructure revenue and market leader AWS reported a tad under $10 billion for the quarter.
As with Google, Alibaba sits well in the back of the pack, as Synergy Research’s latest market share data shows. The chart was generated before yesterday’s report, but it remains an accurate illustration of the relative positions of the various companies.
Alibaba has a lot in common with Amazon. Both are eCommerce giants. Both have cloud computing arms. Alibaba, however, came much later to the cloud computing side of the house, launching in 2009, but really only beginning to take it seriously in 2015.
At the time, cloud division president Simon Hu boasted to Reuters that his company would overtake Amazon in the cloud market within 4 years. “Our goal is to overtake Amazon in four years, whether that’s in customers, technology, or worldwide scale,” he said at the time.
They aren’t close to achieving that goal, of course, but they are growing steadily in a hot cloud infrastructure market. Alibaba is the leading cloud vendor in China, although AWS leads in Asia overall, according to the most recent Synergy Research data on the region.
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Alibaba unveils Hanguang 800, an AI inference chip it says significantly increases the speed of machine learning tasks
Alibaba Group introduced its first AI inference chip today, a neural processing unit called Hanguang 800 that it says makes performing machine learning tasks dramatically faster and more energy efficient. The chip, announced today during Alibaba Cloud’s annual Apsara Computing Conference in Hangzhou, is already being used to power features on Alibaba’s e-commerce sites, including product search and personalized recommendations. It will be made available to Alibaba Cloud customers later.
As an example of what the chip can do, Alibaba said it usually takes Taobao an hour to categorize the one billion product images that are uploaded to the e-commerce platform each day by merchants and prepare them for search and personalized recommendations. Using Hanguang 800, Taobao was able to complete the task in only five minutes.
Alibaba is already using Hanguang 800 in many of its business operations that need machine processing. In addition to product search and recommendations, this includes automatic translation on its e-commerce sites, advertising and intelligence customer services.
Though Alibaba hasn’t revealed when the chip will be available to its cloud customers, the chip may help Chinese companies reduce their dependence on U.S. technology as the trade war makes business partnerships between Chinese and American tech companies more difficult. It also can help Alibaba Cloud grow in markets outside of China. Within China, it is the market leader, but in the Asia-Pacific region, Alibaba Cloud still ranks behind Amazon, Microsoft and Google, according to the Synergy Research Group.
Hanguang 800 was created by T-Head, the unit that leads the development of chips for cloud and edge computing within Alibaba DAMO Academy, the global research and development initiative in which Alibaba is investing more than $15 billion. T-Head developed the chip’s hardware and algorithms designed for business apps, including Alibaba’s retail and logistics apps.
In a statement, Alibaba Group CTO and president of Alibaba Cloud Intelligence Jeff Zhang (pictured above) said, “The launch of Hanguang 800 is an important step in our pursuit of next-generation technologies, boosting computing capabilities that will drive both our current and emerging businesses while improving energy-efficiency.”
He added, “In the near future, we plan to empower our clients by providing access through our cloud business to the advanced computing that is made possible by the chip, anytime and anywhere.”
T-Head’s other launches included the XuanTie 910 earlier this year, an IoT processor based on RISC-V, the open-source hardware instruction set that began as a project at UC Berkeley. XuanTie 910 was created for heavy-duty IoT applications, including edge servers, networking, gateway and autonomous vehicles.
Alibaba DAMO Academy collaborates with universities around the world, including UC Berkeley and Tel Aviv University. Researchers in the program focus on machine learning, network security, visual computing and natural language processing, with the goal of serving two billion customers and creating 100 million jobs by 2035.
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Alibaba cloud biz is on a run rate over $4B
Alibaba announced its earnings today, and the Chinese e-commerce giant got a nice lift from its cloud business, which grew 66% to more than $1.1 billion, or a run rate surpassing $4 billion.
It’s not exactly on par with Amazon, which reported cloud revenue of $8.381 billion last quarter, more than double Alibaba’s yearly run rate, but it’s been a steady rise for the company, which really began taking the cloud seriously as a side business in 2015.
At that time, Alibaba Cloud’s president Simon Hu boasted to Reuters that his company would overtake Amazon in four years. It is not even close to doing that, but it has done well to get to more than a billion a quarter in just four years.
In fact, in its most recent data for the Asia-Pacific region, Synergy Research, a firm that closely tracks the public cloud market, found that Amazon was still number one overall in the region. Alibaba was first in China, but fourth in the region outside of China, with the market’s Big 3 — Amazon, Microsoft and Google — coming in ahead of it. These numbers were based on Q1 data before today’s numbers were known, but they provide a sense of where the market is in the region.
Synergy’s John Dinsdale says the company’s growth has been impressive, outpacing the market growth rate overall. “Alibaba’s share of the worldwide cloud infrastructure services market was 5% in Q2 — up by almost a percentage point from Q2 of last year, which is a big deal in terms of absolute growth, especially in a market that is growing so rapidly,” Dinsdale told TechCrunch.
He added, “The great majority of its revenue does indeed come from China (and Hong Kong), but it is also making inroads in a range of other APAC country markets — Indonesia, Malaysia, Singapore, India, Australia, Japan and South Korea. While numbers are relatively small, it has also got a foothold in EMEA and some operations in the U.S.”
The company was busy last quarter adding more than 300 new products and features in the period ending June 30th (and reported today). That included changes and updates to core cloud offerings, security, data intelligence and AI applications, according to the company.
While the cloud business still isn’t a serious threat to the industry’s Big Three, especially outside its core Asia-Pacific market, it’s still growing steadily and accounted for almost 7% of Alibaba’s total of $16.74 billion in revenue for the quarter — and that’s not bad at all.
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Alibaba to help Salesforce localize and sell in China
Salesforce, the 20-year-old leader in customer relationship management (CRM) tools, is making a foray into Asia by working with one of the country’s largest tech firms, Alibaba.
Alibaba will be the exclusive provider of Salesforce to enterprise customers in mainland China, Hong Kong, Macau and Taiwan, and Salesforce will become the exclusive enterprise CRM software suite sold by Alibaba, the companies announced on Thursday.
The Chinese internet has for years been dominated by consumer-facing services such as Tencent’s WeChat messenger and Alibaba’s Taobao marketplace, but enterprise software is starting to garner strong interest from businesses and investors. Workflow automation startup Laiye, for example, recently closed a $35 million funding round led by Cathay Innovation, a growth-stage fund that believes “enterprise software is about to grow rapidly” in China.
The partners have something to gain from each other. Alibaba does not have a Salesforce equivalent serving the raft of small-and-medium businesses selling through its e-commerce marketplaces or using its cloud computing services, so the alliance with the American cloud behemoth will fill that gap.
On the other hand, Salesforce will gain sales avenues in China through Alibaba, whose cloud infrastructure and data platform will help the American firm “offer localized solutions and better serve its multinational customers,” said Ken Shen, vice president of Alibaba Cloud Intelligence, in a statement.
“More and more of our multinational customers are asking us to support them wherever they do business around the world. That’s why today Salesforce announced a strategic partnership with Alibaba,” said Salesforce in a statement.
Overall, only about 10% of Salesforce revenues in the three months ended April 30 originated from Asia, compared to 20% from Europe and 70% from the Americas.
Besides gaining client acquisition channels, the tie-up also enables Salesforce to store its China-based data at Alibaba Cloud. China requires all overseas companies to work with a domestic firm in processing and storing data sourced from Chinese users.
“The partnership ensures that customers of Salesforce that have operations in the Greater China area will have exclusive access to a locally-hosted version of Salesforce from Alibaba Cloud, who understands local business, culture and regulations,” an Alibaba spokesperson told TechCrunch.
Cloud has been an important growth vertical at Alibaba and nabbing a heavyweight ally will only strengthen its foothold as China’s biggest cloud service provider. Salesforce made some headway in Asia last December when it set up a $100 million fund to invest in Japanese enterprise startups and the latest partnership with Alibaba will see the San Francisco-based firm actually go after customers in Asia.
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Cloud Foundry Foundation looks east as Alibaba joins as a gold member
Cloud Foundry is among the most successful open source project in the enterprise right now. It’s a cloud-agnostic platform-as-a-service offering that helps businesses develop and run their software more efficiently. In many enterprises, it’s now the standard platform for writing new applications. Indeed, half of the Fortune 500 companies now use it in one form or another.
With the imminent IPO of Pivotal, which helped birth the project and still sits at the core of its ecosystem, Cloud Foundry is about to gets its first major moment in the spotlight outside of its core audience. Over the course of the last few years, though, the project and the foundation that manages it have also received the sponsorship of companies like Cisco, IBM, SAP, SUSE, Google, Microsoft, Ford, Volkswagen and Huawei.
Today, China’s Alibaba Group is joining the Cloud Foundry Foundation as a gold member. Compared to AWS, Azure and Google Cloud, the Alibaba Cloud gets relatively little press, but it’s among the largest clouds in the world. Starting today, Cloud Foundry is also available on the Alibaba Cloud, with support for both the Cloud Foundry application and container runtimes.
Cloud Foundry CTO Chip Childers told me that he expects Alibaba to become an active participant in the open source community. He also noted that Cloud Foundry is seeing quite a bit of growth in China — a sentiment that I’ve seen echoed by other large open source projects, including the likes of OpenStack.
Open source is being heavily adopted in China and many companies are now trying to figure out how to best contribute to these kind of projects. Joining a foundation is an obvious first step. Childers also noted that many traditional enterprises in China are now starting down the path of digital transformation, which is driving the adoption of both open source tools and cloud in general.
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Ambitious Alibaba takes aim at the kings of cloud computing
When you think of the biggest cloud players in the world, one company you might not consider is Alibaba, the Chinese e-commerce giant that held a record $25 billion U.S. IPO in 2014. Alibaba entered the cloud computing business in 2009, just three years after Amazon launched its cloud division, AWS — and Alibaba’s cloud computing efforts are among the ambitious projects that… Read More
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