Future to be dominated by competition, coexistence: experts
Aliyun, the cloud computing unit of e-commerce giant Alibaba Group Holding, reported sales revenue of 190 million yuan ($27.8 million) on Friday, the annual Singles' Day online shopping event, the company said on Saturday.
These sales also saved Aliyun's business clients more than 1.1 billion yuan in IT costs, Alibaba said.
Experts said on Monday that purchasing cloud computing services can greatly boost a company's computing power at a time of its choosing, enabling it to do more business.
Friday was this year's Singles' Day, known as the Double 11 shopping festival, which falls on November 11 each year. On Friday alone, Alibaba's business-to-consumer platform Tmall recorded sales of 120.7 billion yuan.
Peak data usage on Friday reached 175,000 transactions per second and 120,000 payments per second. The figure compared with 400 transactions per second in 2009, when the festival began, representing an increase of 437 times in eight years.
"Servers of many companies are not equipped to handle such surge in demand of computing capacity, and they don't need it all the time, so purchasing from the cloud is a good option to meet temporary demand and keep cost in check," Xiang Ligang, CEO of the telecom industry website cctime.com, told the Global Times Monday.
According to Alibaba, more than 1,000 Chinese companies purchased overseas Aliyun cloud computing services from countries and regions such as the east and west coasts of the US, Hong Kong, Japan and Singapore. The company also opened up bookings on Friday for its services in Europe, the Middle East and Australia.
A global network of data centers can meet the demand of Chinese companies seeking overseas expansion, the company said.
"Data also have to cross 'national' borders, so having computing capability directly at overseas locations helps a company's business and allows it to sell more smoothly," Xiang said.
Aliyun has seen rapid growth in recent years.
In the third quarter ended September 30, the company posted revenue from cloud computing of 1.49 billion yuan, up 130 percent year-on-year, according to the company's exchange filing released on November 2.
The number of paying customers of Aliyun cloud computing business grew to 651,000 from 577,000 in the previous quarter, the company said.
Alibaba said its cloud computing services, featuring the capability of boosting its computing power in a faster and more flexible manner, has wide applications. It can serve customers in e-commerce, finance, tourism, video broadcasting, logistics, meteorology and seismology.
Despite the company's heavy investment in technological improvement for the Double 11 shopping festival, Jack Ma Yun, founder of the e-commerce mammoth, said at a press conference on Friday that the speed of using its services still seems to be too slow, calling it a challenge.
In the first minutes of the shopping event, "we still encountered some technological bottlenecks," said Ma. "This will give us much bigger challenges. How shall we conduct [the event] next year, the year after next year, and three years from now?"
Alibaba has continued to lower the fees for its cloud services, media reports said.
On Thursday, Aliyun set up a world record in low cost for the service with $1.44 for one terabyte of data, breaking the record set in 2014 by Amazon Web Services - cloud computing services offered by Amazon - at $4.51 per terabyte, according to the company.
The low-cost offerings raised concerns that Alibaba may clash with other cloud service providers such as telecom equipment giant Huawei, Internet giant Tencent Holdings, and US-based Amazon and Microsoft.
Xiang said even as Alibaba kept lowering the price of its cloud services, the market is not likely to be dominated by one company, as the market is one featuring niche demand, and smaller providers of unique cloud services will still find a place in the market.
Lin Shirong, a big data analyst with Analysys International, said that as cloud computing becomes more affordable, it will also become a public service.
"Competition is inevitable, as foreign giants also step into China, but the Chinese market is big enough and there are likely to be several giants coexisting," Lin told the Global Times Monday.
