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Inside Alibaba Cloud’s Southeast Asia playbook

Alibaba Cloud is working closely with local customers in joint innovation projects, and has started to launch new services for Chinese and international customers simultaneously to narrow the service gap

A laser focus on working with local partners and tailoring services to the needs of customers across industries has been key to the success of Alibaba Cloud in Southeast Asia, according to a top company executive.

Speaking to Computer Weekly on the sidelines of the ConnectechAsia conference in Singapore, Derek Wang, Alibaba’s global chief cloud architect, said rather than mirror its efforts at home, the Chinese cloud supplier’s playbook in the region has been one of joint innovation.

“We don’t replicate what we’ve done in China, which has a different culture and user behaviour,” said Wang. “Instead, we develop data-driven solutions together with local partners and customers, especially those in retail, manufacturing and finance who know their business better.”

Take e-payments, for example. In Singapore, Alibaba Cloud is working with EZ-Link, a contactless payment service provider and the National University of Singapore to boost Singapore’s data-driven capabilities and pave the way for a pilot data analytics project.

In Malaysia, Alibaba Cloud has teamed up with the federal government to develop an artificial intelligence (AI) platform based on its City Brain smart city management service to ease Kuala Lumpur’s notorious traffic congestion.

That the two local initiatives are centred on the use of AI and data analytics is not coincidental, given that one of Alibaba Cloud’s key differentiators has been about helping organisations make better use of data in various forms to improve business processes and customer service.

Citing Alibaba’s work on Hema, its supermarket chain that blends offline and online experiences in what it calls “new retail”, Wang noted that the company has been able to deliver data-driven insights to improve the shopping experience.

The strategy seems to have paid off. Despite Alibaba Cloud’s belated foray into Southeast Asia – it established its regional headquarters in Singapore in 2015, years behind rival Amazon Web Services (AWS) – it has picked up several notable customers in the region, including low-cost carrier AirAsia and hospitality group Genting.

In Indonesia, Alibaba Cloud claims to have received “a lot of demand” for its services from both enterprises and internet companies since it opened a Jakarta datacentre in March 2018.

“We see great potential in Indonesia, a market that is similar to China a few years ago with its growing use of mobile payments and e-commerce services,” said Leon Chen, country manager for Indonesia and Singapore at Alibaba Cloud.

However, Chen acknowledged that in a less mature cloud market like Indonesia, Alibaba Cloud has been selling more infrastructure services such as compute and storage, while in advanced economies like Singapore, it tends to engage enterprises looking to augment their multi-cloud strategies with platform services and industry-specific offerings.

Although Alibaba Cloud does not reveal growth figures in specific markets, recent market reports suggest that the company has been climbing up the ranks.

It now trails behind AWS in the Asia-Pacific public cloud market, according to Synergy Research, largely thanks to its dominance in China, which accounts for a third of the region’s public cloud spending.

Narrowing the service gap

Being a China-based company, Alibaba Cloud has been launching new cloud services for its domestic customers first before rolling them out worldwide.

Wang said this gap in service offerings will be narrowed gradually by the end of 2018 to cater to customers that want to be on top of the curve in cloud adoption.

“Right now, our domestic cloud portal has over 170 products, while the international portal has about 70 products,” Wang said. “We have an internal initiative to globalise all our products, so from April this year we’ve started launching new products simultaneously in China and globally.”

Making products available to global customers not only involves language customisation, but also software upgrades, Wang said, adding that Alibaba Cloud will continue to cater to local demands.

“In Europe, for example, we have more industrial customers in Germany that do high performance computing, while regions like Southeast Asia tend to have more internet companies that demand more internet-oriented products,” he said.

Read more about cloud computing in ASEAN

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