Salesforce teams up with Alibaba in foray into China

Salesforce is making its foray into mainland China through a partnership with e-commerce giant Alibaba, which will become the exclusive supplier of Salesforce’s customer relationship management (CRM) services in China, Hong Kong, Macau and Taiwan.

For a start, only Salesforce Sales Cloud, Service Cloud, Commerce Cloud and Salesforce Platform will be available through Alibaba’s cloud infrastructure that spans major cities across China, including Shanghai, Beijing, Shenzhen and Hangzhou.

Ryan Aytay, Salesforce’s executive vice-president of strategic partnerships and co-CEO of enterprise-collaboration platform Quip, said the partnership with Alibaba was inked in response to multinational customers that have asked for its support in places where they do business.

“With Alibaba’s strong, advanced and secure cloud infrastructure network and insight into the Chinese market, both parties will provide the best localised solutions for our global customers,” he added.

It is uncertain, however, if Alibaba and Salesforce will provide a unified pricing and support structure for Salesforce’s multinational customers that operate in and outside China.

A Salesforce spokesperson declined to go into the details of its conversations with customers, noting that it has had a history of responding to customer needs, such as through acquisitions like MuleSoft that addresses the integration pain points faced by businesses.

Alibaba is the largest cloud supplier in China. It is also the largest cloud computing service provider in Asia-Pacific based on market share for infrastructure as a service (IaaS) and infrastructure utility service, according to Gartner.

During the March 2019 quarter, Alibaba’s cloud revenue grew 76% year-over-year to reach RMB7,726 million (US$1.1bn), driven primarily by an increase in average spending per customer.

In fiscal year 2019, it served more than half of the top listed companies in China and said it will continue to invest to further expand its market share by developing value-added products and features.

Salesforce’s entry into China comes on the heels of the decision by rival Oracle to close its research and development outfit on the mainland and lay off a number of employees.