Alibaba's (NYSE: BABA) cloud computing unit recently announced plans to release eight new products equipped for big data and artificial intelligence. One of the new products that features AI has the ability to access an item's listing on an e-commerce website. Other products will reportedly improve the overall cloud infrastructure, as well as security and private cloud mechanisms for other Alibaba subsidiaries. The billion-dollar company has also released a product that can locate security susceptibility within a network.
Alibaba Cloud, launched in 2009 as a subsidiary of Alibaba Group, first began as a private cloud computing network that solely served Alibaba's e-commerce businesses. Today, the cloud platform is of the most prominent in China, with six data centers on the mainland. In addition, Alibaba also operates eight regions across the world. Since its initial launch years ago, Alibaba Cloud has grown, and offers increasingly sophisticated services, such as object storage and elastic computing. Alibaba's introduction of high-tech products into the global market will allow them to focus on serving more customers in Europe, a region that has not received as many products in the past.
Yeming Wang, general manager of Alibaba Cloud Europe expanded on Alibaba's expansion into Europe, stating that they "need to service local clients leveraging [their] computers on the AI and big data." Wang continued, noting that the cloud computing arm of Alibaba in Europe "is still like a baby," and that their global presence is important because "everyone is talking about digital transformation." The creation of new products for Europe may lead to the expansion in the continent, which currently only has one Alibaba data center in Frankfurt, Germany. As such, Wang has also mentioned that Alibaba may introduce new data centers to the region. Current attempts to foster a stronger relationship with Europe is Alibaba's plan to establish relationships with Vodafone (NASDAQ: VOD) in Germany, and the French business incubator Station F.
For its companies in America, the company has already seen growth in revenue. Alibaba has already offered its cloud computing services to Chinese companies that are also located in the U.S., such as the drone producer DJI (INDEXDJX: .DJI). In addition, the e-commerce and AI conglomerate is currently targeting American companies that use Alibaba services in their data centers in China, pressuring them to use Alibaba services in America as well. However, such expansion in America will not be met without competition. E-commerce giant Amazon (NASDAQ: AMZN) offers a popular option for cloud computing: Amazon Web Services (AWS). In contrast, AWS had $5.11 billion in revenue during the fourth quarter of 2017. Likewise, Alibaba has under 4 percent share of the global cloud market, a number that falls under the share of other cloud providers like Microsoft (NASDAQ: MSFT), Google (NASDAQ: GOOGL) and IBM (NYSE: IBM).