Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      Starlink to South Africa: ‘We are ready to invest’

      17 June 2025

      Vodacom CEO Joosub bags R71m in pay – but taxman will take a big cut

      17 June 2025

      Major rift opens between Microsoft and OpenAI

      17 June 2025

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      South African AI energy start-up in R32m funding round

      17 June 2025
    • World

      Trump Mobile dials into politics, profit and patriarchy

      17 June 2025

      Samsung plots health data hub to link users and doctors in real time

      17 June 2025

      TechCentral Nexus S0E2: South Africa’s digital battlefield

      16 June 2025

      Yahoo tries to make its mail service relevant again

      13 June 2025

      Qualcomm shows off new chip for AI smart glasses

      11 June 2025
    • In-depth

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025

      South Africa unveils big state digital reform programme

      12 May 2025

      Is this the end of Google Search as we know it?

      12 May 2025
    • TCS

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025

      TCS+ | The future of mobile money, with MTN’s Kagiso Mothibi

      6 June 2025

      TCS+ | AI is more than hype: Workday execs unpack real human impact

      4 June 2025

      TCS | Sentiv, and the story behind the buyout of Altron Nexus

      3 June 2025

      TCS | Signal restored: Unpacking the Blue Label and Cell C turnaround

      28 May 2025
    • Opinion

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025

      South Africa’s next crisis? Being offline in an AI-driven world

      2 June 2025

      Digital giants boost South African news media – and get blamed for it

      29 May 2025

      Solar panic? The truth about SSEG, fines and municipal rules

      14 April 2025

      Data protection must be crypto industry’s top priority

      9 April 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Cloud services » Alibaba to invest R530-billion in global cloud expansion

    Alibaba to invest R530-billion in global cloud expansion

    By Agency Staff20 April 2020
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    Alibaba Group will invest US$28-billion (R530-billion) on cloud infrastructure such as data centres over the next three years, a major effort to extend one of its fastest growing businesses to more countries.

    That huge outlay — equivalent to about half the revenue the entire company generated in the 2019 financial year — underscores the importance of a division Alibaba relies on to spearhead its international expansion. The Chinese e-commerce giant now plans to build more data centres to complement an existing network covering 21 regions globally and support the development of technologies in areas such as AI-inference chips, it said in a statement.

    Cloud computing has become one of Alibaba’s fastest growing initiatives beyond the traditional e-commerce sphere. The division’s revenue rose 62% to 10.7-billion yuan in the December quarter as Alibaba chipped away at Amazon.com’s and Microsoft’s global lead in the business of providing online computing as a service. The Chinese company is now recognised as one of Asia’s leading cloud players, though Tencent and Baidu are stepping up competition at home and abroad.

    The amount they are spending over three years should be just about equivalent to the revenue they generate

    “The key focus in the medium term is to gain scale, in customers, infrastructure and product offerings,” Bloomberg Intelligence analyst Vey-Sern Ling said of the cloud division. “Profitability is not a near-term focus. The amount they are spending over three years should be just about equivalent to the revenue they generate, keeping the segment at near-break-even level as it has been for the past few quarters.”

    Like Amazon’s, Alibaba’s cloud service emerged from the computational power needed to handle millions of online shopping transactions. But unlike its US counterpart, it enjoys home-field advantage in a vast Chinese market where Web-based computing is still novel to many enterprises. Its push into the cloud, where software and services are provided to customers via server farms the size of football fields, could help cushion Alibaba against domestic consumption shocks to its core operation.

    Broad impact

    Even before China recorded its first economic contraction in decades, Alibaba had warned that the novel coronavirus outbreak would have a broad impact on its business. The cloud computing division is also key to the company’s efforts to harness the enormous amounts of data generated daily — what Alibaba co-founder Jack Ma once referred to as “new oil”. The unit now accounts for about 7% of Alibaba’s revenue but is expected to climb.

    “By increasing our investment on cloud infrastructure and fundamental technologies, we hope to continue providing world-class, trusted computing resources to help businesses speed up the recovery process, and offer cloud-based intelligent solutions to support their digital transformation in the post-pandemic world,” Jeff Zhang, president of the Alibaba Cloud Intelligence division, said in the statement.  — Reported by Zheping Huang, (c) 2020 Bloomberg LP



    Alibaba Baidu Jack Ma Tencent top
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleFacebook, Google to be forced to pay for news in Australia
    Next Article Covid-19 leaves South Africa’s renewable energy plans in disarray

    Related Posts

    China is behind in AI chips – but for how much longer?

    13 June 2025

    Nvidia CEO says China is catching up fast in AI chip race

    29 May 2025

    Temu hits turbulence

    27 May 2025
    Company News

    Altron: a brand journey, a birthday celebration and a bet on Joburg’s future

    17 June 2025

    7 benefits of social media integration in WordPress

    17 June 2025

    Paratus Zimbabwe and PowerTel strike milestone deal

    17 June 2025
    Opinion

    Beyond the box: why IT distribution depends on real partnerships

    2 June 2025

    South Africa’s next crisis? Being offline in an AI-driven world

    2 June 2025

    Digital giants boost South African news media – and get blamed for it

    29 May 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.