|By Ian Khan||
|August 8, 2015 02:00 PM EDT||
Crocodile in the Yangtze Signals Certainty of a Global Cloud War
Alibaba, the world's largest ecommerce provider, has pumped over a $1 billion into its subsidiary, Aliya, a cloud services provider. This is perhaps one of the biggest moments in the global Cloud Wars that signals the entry of China into the main arena. Here is why this matters.
The cloud industry worldwide is being propelled into fast growth by tremendous demand for cloud computing services. Cloud, which is highly scalable and offers low investment and high computational capabilities to end users by eliminating the need to buy costly infrastructure and instead rent it from cloud providers, is now projected to be a $200 billion industry worldwide by 2020. This estimate may even get inflated as we get closer to 2020, given the fast growth rate of cloud.
For cloud providers, the ability to provide services to customers comes in many shapes and sizes. Manufactures, resellers, platforms, vendors and multiple other customer types build an ecosystem of the customer base for a typical cloud services provider. Some vendors specialize in cloud infrastructure and help provide computation capacity, storage, databases and more complex aspects that are a must for technology industries, software companies and enterprises to function. Many others just focus on specific needs, such as storage or processor power. Move on now to providers that we typically know to be large scale providers that have a proven business model. This includes names such as Google, Microsoft and Amazon. Those of us who see Amazon as only an online retailer need to brush up a little on their general knowledge. From its early days as an online book store, Amazon now is one of the world's largest providers of cloud Infrastructure and is rivalled by only few other names. Amazon has solidified its business by taking what it already had, the costly infrastructure that it had put into place for its own use, and spinning it off into a cloud business. Amazon now offers a myriad number of highly specialized cloud services that are needed by the technology industry to power their own businesses.
On the other side of the ocean, consider Alibaba. A leading rival of Amazon and now fast becoming a looming threat to Amazon's dominance, Alibaba's story is similar to that of Amazon. It has quickly grown from being one of China's largest ecommerce retailers to becoming a powerhouse of cloud computational power. That's not the end of the story. Alibaba just injected over $1 billion into its cloud computing subsidiary and this for sure is a big knock on the doors of Amazon and its companions of an emerging battle to dominate the cloud. The $1 billion will get Alibaba a lot of experimentation power. Just the ability to create new offerings that rival and even offer cut-throat competition to Amazon is a blow to Amazon's dominance worldwide. Although other players such as Google and Microsoft form major counterparts in the global Cloud Wars, their reaction to a new competitor will be worth noting.
For now and for the next few years, the cloud industry offers tremendous growth opportunities: first because demand is growing and second we have not reached a saturation point overall. There are multiple industries and verticals that definitely have growth space to offer. What is going to be interesting is how players from economies such as China, India and other tech-savvy regions will enter the mainstream. For consumers the news could not get any better. More providers offer the convenience of lower costs for cloud-based services and translate into higher availability of services that utilize cloud computing technologies. The next time you pay for our coffee at Starbucks or pay for your parking using a credit card, let me point out that you just utilized a small aspect of cloud technology. Now consider all the trade, innovation and computation that powers the global industries. It's tremendous!
With new providers such as Alibaba entering the global arena of cloud computing, it would be worth considering that the cloud is going to be an exciting front, and Cloud Wars a definite certainty.
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