How Alibaba Cloud plans to take on Amazon, Microsoft in India

Chinese conglomerate Alibaba is looking to leverage its expertise in e-commerce and fintech to convince more Indian customers to sign up for its cloud offerings, a senior executive told TechCircle.

Jack Ma-led Alibaba dominates the Chinese cloud computing market and is currently the second-largest player in the Asia-Pacific and Japan region. Alibaba Cloud opened its first data centre in India earlier this year.

Alex Li, who heads Alibaba’s cloud business for Asia-Pacific, said that India presents an immense growth opportunity - pegged at $150 billion - given the rapid digital transformation that is taking place in the country.

“India is a key market in Alibaba Cloud’s globalisation strategy, and we see tremendous opportunity to help local enterprises grow," Li said. "Our strong expertise in e-commerce, logistics, retail and fintech have helped us develop cloud solutions which can add value to our current as well as prospective customers."

Alibaba Group has invested in a number of internet companies in India, including digital wallet firm Paytm and online grocery startup BigBasket. Li said that Alibaba Cloud was working to accelerate adoption of its services among these portfolio companies.

Alibaba Cloud recently launched a new distribution channel to take on strong US rivals Amazon Web Services (AWS) and Microsoft Azure. As part of the initiative, channel partners are encouraged to create awareness among ecosystem participants such as sales, technology and service partners. The team will focus on startups and internet companies to kickstart Alibaba Cloud's growth in India, Li said.

Alibaba Cloud has 49 availability zones - isolated locations within data centre regions from which public cloud services originate and operate - across 18 economic centres globally, including one in Mumbai. 

Li said that the India centre was large enough to cater to the demand for the next three to five years on the basis of projected demand. Most large cloud players including Azure, AWS, and Google Cloud have set up data centres in India over the past two to three years.

"The Mumbai data centre has allowed us to service our existing customers better, while also enabling us to offer localised services to address the increasing market demand from enterprises, internet and e-commerce companies along with small and medium enterprises," Li said, adding that the data localisation regulations would not hamper Alibaba's growth in India.

Apart from the data centre, Alibaba will invest in infrastructure and talent in India. Li said that Alibaba Cloud was looking to train more than 1,000 people in technology and sales by end of this year.

"We will keep the momentum in India going by building our team, product portfolio and brand awareness. Our unique differentiator is based on our diverse brand portfolio and the experience we bring to the table from other global markets," Li said.

While US tech giants have a longer history of working with large enterprises in India, Li said that competing with those players will include rivalling them on price as well apart from product differentiation and customisation, thereby providing more value to clients.

"While pricing does play an important role in this market and we want to keep the pricing competitive, we also believe that customers in India also look for value. We have developed many special capabilities in terms of video technologies and mature solutions which are different from the offerings of other players," Li said.

Alibaba is also exploring multiple opportunities in India’s Smart Cities Mission, where the central government has selected 100 cities for urban renewal and for which technology will play a key role. 

"We believe that businesses operating in India along with the vibrant startup ecosystem are well positioned to support the central and state governments in this initiative," Li said.

Making the case for Alibaba's participation in government projects, Li said 

Alibaba has developed the ET Brain series, a proprietary artificial intelligence programme aimed at helping different verticals tackle real-world challenges. It has been launched in markets like Hangzhou, Macau and Malaysia among others. 

"That has given us the required experience to implement innovative technologies," Li said.

He further said that concerns over privacy and surveillance by the Chinese government were unwarranted as the company is listed in the US and complies with all local laws in markets where it operates.