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Retail focus is key to Alibaba’s new London datacentre

China’s e-commerce giant has been slowly expanding into Europe and is now heading for a clash of the titans against AWS and Azure

Chinese e-commerce company Alibaba has expanded its European public cloud business into the UK with two new availability zones. 

But its goal in London is not about chasing after Amazon Web Services (AWS) and Microsoft Azure business. Instead, Alibaba Cloud sees an opportunity to sell its expertise gained from running the cloud for its parent company, which is one of the world’s largest retailers.

Expertise in analytics and artificial intelligence (AI) for retailers is one of the ways in which Alibaba Cloud hopes to forge its UK niche. But the public cloud business of China’s e-commerce giant also offers a foothold for European businesses to step into the Chinese market.

The London availability zone joins Frankfurt, which was opened earlier this year. Now, with London and Frankfurt and discussions starting about the prospect of a French and Nordic availability zone, Alibaba Cloud is also bridging the East-West divide, providing a cloud-enabled link to facilitate e-commerce between China and Europe.

Gartner’s September 2017 Magic Quadrant market analysis of public cloud providers noted that Alibaba had “very little” to differentiate it from the other runners and riders in the public cloud space. But as it begins to flesh out its European expansion, the company has tried hard not to be listed as just another infrastructure-as-a-service (IaaS) public cloud provider.

However, during an event in London to announce the expansion, Yeming Wang, general manager at Alibaba Cloud, discussed how the UK operations would attempt to differentiate itself from the competition by being vertically focused.

Wang described AWS as develop-focused and said Azure is about Office, and GCP is about machine learning and AI. “Our strengths are retail, financial services and media,” he said. “Our target is to position Alibaba as a leader with vertical cloud expertise.”

He said Alibaba Cloud is well positioned to offer a compelling cloud to potential retail customers in the UK, given its experience running all of the retail, logistics and media cloud services for the entire Alibaba group. “We know the minutiae of using big data and work with our retail group to collect offline and online data, which is fed to middleware platforms and onto our advertising platform.”

Focus on retail

While Alibaba Cloud has focused on manufacturing verticals in Germany, with customers including SAP and Siemens, Wang said: “In London, we will focus on retail, smart stores, and helping retailers build a better and targeted customer experience.”  

Describing the role of Alibaba’s public cloud, he said: “It is not just about SaaS, IaaS or PaaS [software, infrastructure or platform as a service]. We are thinking about a vertical business as a service, especially in retail and fintech and we want to be results-driven.”

Alibaba regards its vertical focus as a differentiator from the PaaS and IaaS public cloud offerings from the likes of Microsoft and Amazon.

In a recent interview, Derek Wang, chief solution architect at Alibaba Cloud, said: “Alibaba has been leading innovations in retail, and we have been doing a lot of trials in China on ‘new retail’ concepts that are data-driven.”

One example is Hema, its supermarket chain that blends offline and online experiences.The company has used data-driven insights to improve its customers’ shopping experience.

But its ambitions seem to go beyond simply targeting retail customers. The company is also using AI-powered and data-driven technology. Alibaba Cloud’s latest datacentres provide access to a range of cloud services, from machine learning capabilities to predictive data analytics.

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Media company Ascential is one of Alibaba Cloud’s European customers. Sean Harley, chief information officer at Ascential, said: “In an increasingly complex, digitally driven world, we need a service provider that is equally ambitious and has the geographical, vertical and technical know-how to support us, not only in China but eventually across the world to help us better serve our global customers.”

Beyond technical capabilities, Alibaba Cloud has set its sights on forging business partnerships with its customers, facilitating cross-border trading. Yeming Wang said: “Our first customers were being supported across China to Asia, and from Asia to Europe.”

From speaking to the cloud company's European general manager, Alibaba’s intention seems to be to provide a way to facilitate commerce between China and the UK over the Alibaba Cloud.

For instance, Alibaba uses the language translation service from its customer, SDL. Azad Ootam, chief transformation officer at SDL, said: “We have a very good relationship with Alibaba. Our technology, our software and our know-how are sat on top of the Alibaba platform.

“We can deliver solutions to help customers go global faster than they could on their own. We can help people get into China and, if you think about where the Chinese market is heading, help Chinese businesses back this way, into Europe.”

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