Rather than build its own infrastructure, Alibaba’s cloud computing division Aliyun Computing has entered into strategic partnerships with seven companies, including Intel, US data center company Equinix, and Singapore telecom giant Singtel. The deals will use the partner company’s data centers to bolster Aliyun’s global cloud offerings, putting it in direct competition with the likes of Amazon AWS, IBM, Google and Microsoft.
This is not Aliyun’s first expansion out of China. Earlier this year, Alibaba opened its first US data center in Silicon Valley. But these partnerships signal Alibaba’s intent to expand into global markets without the cost of building more data centers in different countries.
At a time when the cloud computing market is quickly expanding (1), the major cloud players in the US will face heightened competition as Alibaba enters the market. With most cloud-based CRM providers relying on the infrastructure of cloud computing providers, increased competition in this space should, in time, lead to expanded cloud product offerings and downward price pressure, benefiting companies like the CRM providers that rely on this infrastructure.
(1) For more insight into the growth of the cloud infrastructure service market, see “AWS Still Bigger than its Four Main Competitors Combined Despite Surging Growth” from Synergy Research Group.