Alibaba Cloud announced in a press release today that it will invest $28.2 billion into its cloud infrastructure over the next three years to ensure the successful functioning of its services.
The investment has been prompted due to increased demand for services like video conferencing and live-streaming as businesses adapt to the COVID-19 pandemic.
Jeff Zhang, president, Alibaba Cloud Intelligence said in the statement: “The COVID-19 pandemic has posed additional stress on the overall economy across sectors, but it also steers us to put more focus on the digital economy,”
Alibaba Cloud is currently the biggest cloud computing provider by market share in China and is the top cloud provider in the Asia Pacific market, according to Gartner.
Their cloud offering for the rest of the world, and particularly in the western world, still trails U.S. giants Amazon and Microsoft despite their international push, according to Synergy Research.
Zhang continued to say: “By increasing our investment on cloud infrastructure and fundamental technologies, we hope to continue providing world-class, trusted computing resources to help businesses speed up the recovery process, and offer cloud-based intelligent solutions to support their digital transformation in the post-pandemic world,”.
Alibaba is not the only business increasing its attention and resources towards cloud technology with Insight Partners acquiring cloud backup and data management firm, Veeam, for $5 billion back in the ideal time of early January 2020.
Although their cloud service only makes up 7% of its total business revenue, executives are putting a lot of focus and resources to increase their market share.
“I think cloud will be … the main business of Alibaba in the future,” Daniel Zhang, CEO and chairman, Alibaba said in a 2018 CNBC interview.
Alibaba is clearly seeing results in their cloud service offering as in their last quarterly earnings report, issued in February, Alibaba reported cloud revenue grew 62% to $1.5 billion. Although it’s only 7% of their total business revenue, it’s their fastest growing service initiative.
