Alibaba Group Holding Ltd (NYSE: BABA) has a cloud computing unit called Aliyun, which recently started to collaborate with Intel Corporation (NASDAQ: INTC) on utilizing cloud services of Intel itself as well as other Alibaba partners. The goal is to meet the needs of developers by providing them with access to advanced cloud services.
This step is positioning Alibaba and Intel in direct competition against cloud computing giants like IBM (NYSE: IBM), Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), and Google (NASDAQ: GOOG). It is very much possible that Alibaba will be able to steal some of these companies market share in cloud services. The giant Chinese base E-Commerce has seven partners assisting with the cloud segment. Besides Intel the list of partners includes the U.S. company Equinix (NASDAQ: EQIX), and Singapore telecoms giant Singtel. These partnerships put enable the e-commerce giant to better compete with its rivals and ease the firm’s ambitions to proliferate globally.
Alibaba has already invested heavily in promoting the cloud business. The company opened a data center in Silicon Valley earlier in 2015, and has other data centers around the world developed by their partners. Alibaba plan is to save money on developing these data centers and at the same time to use it to promote the services it offers through its partners.
The results from the rapidly increasing cloud services business of Alibaba are impressive. Revenue from the segment jumped from 213 million Yuan the first quarter of 2014 to 388 million Yuan for the first quarter this year. This is a 82% increase, and it is only projected to grow.