- Alibaba Cloud is gaining a stronger foothold in Indonesia with its second data centre, a growing partnership ecosystem and an initiative to support start-ups to develop their business through a cloud-native approach.
- Alibaba needs to grow its international presence, and it is establishing an early presence in markets such as Indonesia where competitors do not yet have a local presence.
Alibaba Cloud has launched a second data centre in Indonesia after launching the first data centre 10 months earlier. The second data centre enables Alibaba Cloud to increase capacity, provide higher availability and improve disaster recovery capabilities. The company also launched the Internet Champion Global Accelerator Program to support the growth of start-ups and local talents. The program will provide training, mentorship and venture capital opportunities to enterprises and professional services. The program is launching in Jakarta, and it will be extended to Bali in January 2019, as well as other global markets in the future. This is a strategic move since start-ups and SMEs in general are more ready to adopt a cloud-native approach and can become heavy cloud users as they scale up.
Alibaba’s cloud revenue continued to grow strongly by 90% YoY in the quarter ended September 30, 2018. Alibaba Group has the financial strength and it remains committed to investing in its cloud business, following the footsteps of Amazon. It has been focusing on keeping pace with competitors in rolling out new products. For example, its Smart Access Gateway (SAG) is a competing product against Microsoft’s Azure Virtual WAN. Some other key products launched globally in recent months include its Data Lake Analytics, Apsara Stack (on-premises private cloud) and Global Blockchain-as-a-Service. It now has an extensive product set to compete with AWS, Microsoft and Google.
However, the company’s success up until this point has been mainly in China. Outside of China, the company has gained some advantages by getting into markets such as Malaysia and Indonesia early. Indonesia is experiencing economic growth, but its cloud market is relatively small. GlobalData estimates the Indonesian infrastructure-as-a-service (IaaS) market in 2018 to be worth only about US$90 million (about 1% of the Asia-Pacific cloud market). This is partly due to the lack of infrastructure and the presence of hyper-scale cloud providers in Indonesia. This is expected to change as more competitors enter the market. For example, Google Cloud announced in November 2018 that Jakarta would become its eighth region in Asia-Pacific.
Alibaba is ahead of its rivals in establishing presence in Indonesia, and it wants to maintain the lead by strengthening its capabilities in the country. As part of its strategy to grow in Indonesia, Alibaba Cloud is strengthening its local channel network. Alibaba Cloud highlighted in the press release a strategic partnership with PT IndoInternet as the distributor of its full range of cloud computing products and services. Other key partners highlighted include PT Blue Power Technology and PT Sistech Kharisma.
Alibaba Cloud has in a short period of time established itself as a major hyper-scale public cloud provider. The company is investing heavily to stay ahead in product innovation, as well as expanding its coverage and partner ecosystem. Alibaba is expected to maintain its growth momentum, and more service providers are expected to offer managed Alibaba Cloud. Rackspace, for example, is already an Alibaba global managed service partner, helping customers to architect, migrate and manage Alibaba Cloud services. HPE also announced in August 2018 that it became the first vendor in Australia to offer Alibaba’s Apsara Stack (on-premises hybrid cloud optimised for HPE servers) and it was planning to bring the offering to Asia-Pacific in the same year.