Alibaba Cloud Market Share 2018: The Next Big Cloud Provider?
After reviewing Q1 earnings for the ‘big three’ cloud providers last week, it’s obvious AWS is still number one overall. While the other CSPs are growing faster than expected, what about the Alibaba cloud market share? Alibaba made big waves in Asia, dominating in China with accelerating cloud revenue. Here’s the deal with Alibaba Cloud, and why it should not be overlooked in 2018.
Alibaba Cloud at a Glance
Following, Amazon, Google, and Microsoft, Alibaba made headlines of its own when they reported cloud revenue for the March quarter:
Here’s what the quarterly earnings report tells us:
- Alibaba’s annual cloud revenue reached $2.1 billion for the quarter, up 103 percent.
- In comparison, AWS growth was at 49 percent for the same period, although Alibaba’s cloud revenue can’t quite compare with the $5.4 billion AWS generated in the fourth quarter.
- Cloud computing revenue saw 101 percent year-over-year growth for fiscal 2018.
- Alibaba´s IaaS segment is dominating in China, with almost 47.6 percent of the market share, up from 43 percent only a year ago, crediting growth from recent customer additions and value added products.
What’s clear:
Alibaba is growing its market presence, not only with a firm hold over Asia, but also securing a spot as one of the top five cloud providers worldwide. Synergy Research Group reported Q1 2018 market share numbers: Amazon 33%, Microsoft 13%, IBM 8%, Google 6% and Alibaba 4%.
In comparison to other cloud providers, Alibaba might be in last place among the top five, but they also show consistently steady, upward growth, and land only a hair shy of catching up to Google at 6 percent. And while AWS has a third of the total market share, Alibaba holding onto nearly half of China’s market share is nothing to scoff at.
Not to mention the company added 316 new products and features to their cloud platform in the fourth quarter alone, added a data center in Indonesia, and acquired or partnered with major enterprise customers including China National Petroleum Corporation, Malaysia Digital Economy Corporation, and Cathay Pacific, showing no signs of slowing down anytime soon.
Alibaba Cloud Market Share — 2018 and Beyond:
The opening of a data center in Indonesia expanded Alibaba Cloud’s reach to 18 countries and regions worldwide, setting their sights high and with the expectation of continued growth. If that’s not a clear indication of future success, the outlook of company executives sheds more light.
Daniel Zhang, CEO of Alibaba Group, says “Alibaba Group had an excellent quarter and fiscal year, driven by robust growth in our core commerce business and investments we have made over the past several years in longer-term growth initiatives. […] During the past year we also doubled down on technology development, cloud computing, logistics, digital entertainment and local services so that we are in a position to capture consumption growth in China and other emerging markets.”
Maggie Wu, CFO of Alibaba Group, echoes this sentiment, saying “Looking ahead to fiscal 2019, we expect overall revenue growth above 60%, reflecting our confidence in our core business as well as positive momentum in new businesses. We expect our new growth initiatives will drive long-term, sustainable value for our customers and partners and increase our total addressable market.”
So as the Alibaba cloud market share grows, could they be the next big cloud provider in 2018? Will they jump into the ‘big three’ or will it become a ‘big five,’ including IBM’s market share? What we know for sure is that we can expect more growth, and that’s a good thing for all of us because growth drives competition, innovation, and better offerings for all. So while we continue looking at AWS, Azure, Google, and IBM in the next year, we’ll also be keeping an eye on Alibaba Cloud and other up-and-coming providers to see what they bring to the table.
Originally published at www.parkmycloud.com on May 8, 2018.
