Alibaba, an emerging powerhouse in the booming public cloud, says its first data center in Malaysia has opened, marking the latest example of the Chinese tech giant’s rapid global expansion to compete with market leader Amazon.
The data center in the Malaysian capital of Kuala Lumpur will give Alibaba another foothold in the growing Asia-Pacific market, where research firm IDC projects demand for cloud services will surpass $10 billion this year.
It’s also the first time a cloud provider has opened a data center in Malaysia. The four major players — Amazon, Microsoft, Google and Alibaba — all have established cloud regions in Singapore, and Rackspace recently announced its own expansion into Singapore.
Alibaba says the new data center will link with existing facilities that house server farms in Singapore and Hong Kong to provide customers with “private or dedicated connections between different cloud environments, providing customers with cross-border hybrid cloud services.” The facility will also provide Alibaba’s Malaysian customers with traditional cloud products, along with its“MaxCompute” offering focused on big data processing and analytics powered by machine learning
At the company’s annual cloud computing summit in Shanghai earlier this month, the head of Alibaba’s cloud computing arm promised even more investments in the APAC region.
“We will provide more Chinese technologies for countries like Malaysia and Indonesia,” Xiaoming Hu, president of Alibaba Cloud Computing told reporters at a press conference. “There will be bigger things coming up.”
Aliaba has aggressively been trying to gain ground on market leader Amazon and currently operates 15 data centers around the world — from Europe to the Middle East. It also has two in the United States.
The company has already announced plans for two more data centers to open next year in India and Indonesia. The two data centers will significantly increase Alibaba’s computing resources in Asia, allowing greater support for small and medium enterprises throughout the region.
Hu also said that Alibaba is planning to increase its investment in European markets with a new data center in Germany (Bloomberg has reported that Alibaba is already scouting locations for a new data center in Europe).
The company’s rapid cloud expansion has paid off so far. Alibaba is growing faster than all of its competitors in the cloud, according to research firm Gartner, and currently ranks third in the Infrastructure-as-a-Service market, far behind Amazon and Microsoft.
But penetrating prosperous markets in Europe and the United States will be difficult for Alibaba and that will ultimately hurt the company’s abilities to catch up, says Morningstar analyst Rodney Nelson. Still, Alibaba is the clear cloud leader in its home country and China “is not even remotely as far down the road of migrating to the cloud, so there is much pent-up demand,” Nelson said.
“While Alibaba has assets internationally, it’s probably going to be a pretty big challenge for them to win Western business because of that association with China. That adds a lot of red tape to dealing with the company,” Nelson said in a piece published on the investment research firm’s website Tuesday. “They will win some business internationally, from Chinese firms that have international interests. Winning European business and American business is almost going to be impossible but the Chinese market is large enough to support a very high rate of growth and very durable returns on invested capital.”