Alibaba Cloud launches its first personal cloud product, challenging Baidu and Tencent

Jane Zhang
·3-min read

Alibaba Cloud, the data backbone of Chinese e-commerce giant Alibaba Group Holding, has launched its first personal cloud product Alibaba Cloud Drive, challenging established players like Baidu and Tencent Holdings in China.

The service, which opened for public testing on Monday for both Android and iOS systems, offers users up to two terabytes of free storage and “unlimited” uploading and downloading speeds, according to a company statement. However, these speeds depend on the internet provider.

Founded in 2009, Alibaba Cloud is China’s biggest cloud computing services provider, mainly focused on enterprise businesses. The expansion into the personal cloud service market is aimed at gaining a slice of a segment that had 404 million users in 2020, according to estimates from data mining and analysis firm iiMedia Research.

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Search engine giant Baidu topped the personal cloud service market in China with nearly 40 million monthly active users (MAU) for its Baidu Wangpan as of last July, followed by social media giant Tencent’s Weiyun with 4.4 million MAU, iiMedia data showed.

“Baidu Wangpan has a temporary advantage in terms of user scale, but the demand for personal online disks continues to increase … there is still room for change in the industry landscape in the future,” said Zhang Yi, chief executive at Shenzhen-based iiMedia Research.

In the past year, demand for cloud services in the country received a boost from the coronavirus pandemic amid a rapid uptake of online services by consumers and enterprises pursuing digital transformation projects.

Alibaba Cloud has become a major growth driver for its parent company. During the quarter ended December, revenue from Alibaba’s cloud operation grew 50 per cent to 16.1 billion yuan (US$2.47 billion), contributing 7 per cent of the group’s revenue. It was also the first time Alibaba’s cloud arm posted a profit before interest, tax and amortisation. Alibaba is the owner of this newspaper.

We do believe in the future, all the industrial sectors, they need a cloud service,” said Alibaba’s chairman and chief executive Daniel Zhang Yong during a conference call with analysts last month after the company reported its third-quarter results.

China will be spending more on cloud computing, as the nation accelerates its digitisation process, pushing revenues in the public cloud computing market to grow at over 20 per cent per annum from 2019 to 2024, where Alibaba will be the “clear leader”, way ahead of competitors like Tencent, according to a January report by Bernstein.

“In the 5G era, richer cloud service scenarios and capabilities will emerge … the demand from online disk users will continue to rise,” iiMedia Research’s Zhang said.

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