Author | Liu Baodan

Editor | Huang Yu

The wave of companies going overseas combined with the global boom of AI large models has brought new opportunities for cloud vendors to expand internationally. Against this backdrop, Alibaba Cloud is beginning to accelerate its efforts in capturing the global market.

On December 11, at the International Market Development Communication Conference, Yuan Qian, the International President of Alibaba Cloud Intelligence, revealed that in the next three years, Alibaba Cloud will invest in new data centers in five countries around the world, located in South Korea, Malaysia, the Philippines, Thailand, and Mexico. While Alibaba Cloud continues to strengthen its presence in Asia, it is entering the Mexican market for the first time.

Alibaba Cloud's new round of overseas expansion will focus on AI infrastructure, which also means that, after 10 years of going global, Alibaba Cloud is stepping into the deep waters of the Cloud Computing services market.

In 2008, to address the insufficient computing power of Taobao, Alibaba independently developed a large-scale distributed computing operating system called 'Feitian' and invested in establishing Alibaba Cloud the following year. In 2014, as internet companies expanded their businesses globally, the demand for internet infrastructure including Cloud Computing emerged, leading Alibaba Cloud to internationalize.

Alibaba Cloud's first stop in its overseas development was Hong Kong, followed by the establishment of data centers and availability zones in various regions including Asia, Europe, and North America. Currently, Alibaba Cloud operates 85 availability zones across 28 regions worldwide, covering areas in mainland China, Hong Kong, Southeast Asia, Japan and South Korea, the Middle East, and Europe and America.

In 2017, Alibaba Cloud initiated a strategic partnership with the Olympic Committee, participating in the Winter Olympics, Asian Games, and this year's Paris Olympics. The Olympics also reflect the rapid development of Alibaba Cloud. According to Yuan Qian, Alibaba Cloud has seen rapid growth in international markets, with market size increasing over 20 times in the past five years.

After years of deepening its overseas market, Alibaba Cloud welcomed the era of AI. In September last year, Wu Yongming took on the role of CEO of Alibaba Group, clearly stating the strategic focus on 'user-first, AI-driven.' Currently, Alibaba Cloud has laid out the entire AI ecosystem based on Cloud Computing, including the Tongyi Large Model.

As of the quarter ending September 30, 2024, Alibaba Cloud achieved revenue of 29.61 billion yuan, a year-on-year growth of 7%, with revenue from AI-related products showing triple-digit year-on-year growth for five consecutive quarters.

Under the All in AI tone, Alibaba Cloud has also re-targeted the focal points of its international business.

On one hand, Alibaba Cloud needs to serve enterprises going overseas. Song Yingqiao, Vice President of Alibaba Cloud Intelligence International, believes that from 2022 to present, with improvements in Chinese technology, Chinese manufacturing, and the emphasis on brand by China, all sectors have begun comprehensive overseas expansion, entering a grand maritime era for Chinese enterprises.

The overseas expansion model for Chinese enterprises includes four types: direct replication, using the Industry Chain for layout, localized marketing, and localized Operation. They generally face challenges in global management, local Operation, global ecology, and supply chain. Song Yingqiao stated, 'In the face of such challenges, the key that Chinese enterprises must grasp is digitization.'

In addition to the foundation of digitization, AI is also playing an increasingly important role. Besides Cloud Computing services, Alibaba Cloud also provides advanced AI technology and products overseas; for instance, the company launched the Bai Lian platform in Singapore this year.

Song Yingqiao believes that AI can empower enterprises in three aspects: efficiency enhancement, intelligence, and brand digitization. 'Many traditional mechanisms for goods and sales can be reconstructed through AI, allowing brands and goods to connect in ways that were not possible without AI.'

On the other hand, the demand for local enterprises to migrate to the cloud has significantly increased. According to Yuan Qian's observations, in Asia, many countries that previously seemed undeveloped or developing have shown a noticeable increase in the demand for digital transformation. 'Originally, the services were provided to leading large enterprises and groups, but now many local financial and retail companies are also considering effectiveness and efficiency issues during large economic cycles, and need to consider the level of digitalization.'

In her view, investing in Mexico is a long-term strategy of 5 to 10 years, being Bullish on the Latin American market, which not only has a large number of Chinese companies going global but also a growing local demand for digitalization. The other four datacenters in Asia correspond to additional investment. 'Whether it’s Internet Plus-Related, digital transformation, or the overall AI development, Asia is the most active market.'

'The first decade has passed, and we have built the basic platform capabilities. In the next decade, especially in the age of AI, we need to grasp opportunities using better computing power, products, and AI capabilities,' Yuan Qian stated.

Alibaba Cloud's advantage lies in its strong local compliance, such as being the first to obtain the highest local compliance certification in Saudi Arabia. Currently, Alibaba Cloud has over 130 qualifications and certifications, making it one of the most comprehensive cloud providers in Asia.

Secondly, there are product and technology capabilities. According to the report 'The Forrester Wave: Public Cloud Platforms in China 2024' released in August, Alibaba Cloud is in a leader position along with Amazon AWS, Microsoft Azure, and Google GCP, and ranks second globally in terms of product and strategy.

In terms of services, Alibaba Cloud has established 2 global service centers, 4 regional service centers, and 18 local service teams worldwide.

It is also worth mentioning the ecosystem. Yuan Qian stated that in Southeast Asia and other regions, Alibaba Cloud has its partner advantages, and in addition to its own strength, there are many local partners providing support.

Challenges are also evident. As a service provider, Alibaba Cloud's business largely depends on domestic enterprises going global, while the biggest uncertainties faced by cloud computing providers still come from data security and compliance challenges, which can be influenced by international relations, local systems, and policies.

After 15 years of establishment, Alibaba Cloud officially became the core Global Strategy Business of Alibaba Group and will represent Alibaba in the international market. This will determine whether Alibaba can surpass the glory of the former e-commerce king and become a truly globally influential Technology giant.

The road to going global is long and arduous; Alibaba Cloud is set to embark on a new journey.