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June 13, 2018
4 Min Read
According to Gartner's recently released 2018 Magic Quadrant for Cloud Infrastructure as a Service, the number of global IaaS leaders has shrunk considerably. Gone are CSP services such as EMC Virtustream CenturyLink Cloud, and Fujitsu K5. What's left are the usual suspects like AWS, Microsoft Azure, Google, Oracle and IBM.
Yet, there's one name on the list that is considered a major player in the worldwide cloud space -- just as long as you don't look outside China. Of course, I'm speaking of Alibaba Cloud. This raises the question, because of Alibaba Cloud's massive reliance on the Chinese market, does it stand a chance outside the Great Firewall of China?
Just who is Alibaba Cloud?
Time and time again, we see stories that tout Alibaba's similar service, tremendous growth and how it aims to take over AWS from a global perspective. Yet, when looking at global services that Alibaba Cloud offers, there's nothing new or unique compared to AWS, Azure or Google Cloud. But that's not entirely a bad thing. For one, IT departments are looking to diversify their cloud risk by moving toward a multicloud strategy. Thus, being able to leverage similar services and pricing models helps eliminate much of the confusion when working with different providers and how they dole out their services to the end user.
That said, I can walk into nearly any mid- to large-sized enterprise IT department in the US today and find one or more people that either have reasonable proficiency -- or are even certified -- in cloud provider services such as AWS, Google, and Azure. With Alibaba cloud, the same usually cannot be said. Thus, the likelihood of IT administrators even considering the use of Alibaba Cloud services is already reduced considerably in the US. Might this change in the future? Sure. But just don't expect it to happen any time soon.
How global demand, geopolitics, and cloud competition
Another issue that is likely causing trouble for Alibaba Cloud in terms of growth outside China deals with the fact that current demand for cloud services within its home country is greater than any other country. Additionally, because China has in the past lagged in terms of in cloud adoption compared to the West, they still have some ways to go. Thus, because the market is so ripe in China, Alibaba Cloud may be choosing to continue to focus their efforts locally. This is clearly at odds with Alibaba marketing rhetoric. However, it does make sound business sense if that’s what is happening. Alibaba may indeed be purposely be putting off global ambitions until local demand settles.
While its services are available in regions outside of China, it's clear the company's focus has been in China. Despite having a growing cloud presence in places such as the Middle East, Europe and the US, Alibaba Cloud services are limited compared to China.
Other global cloud leaders are attempting to gain traction within China and become a competitor with Alibaba cloud. Yet, it’s been an uphill battle. Regulations put in place by the Chinese government have handcuffed outside providers. AWS was an early entrant into the Chinese market. Yet, they met several setbacks in terms of regulations. Ultimately, Amazon had to essentially sell their infrastructure to a third-party whom has been providing cloud services on AWS’s behalf. While that doesn’t seem terribly disruptive, it has limited the capabilities of AWS within China in terms of seamlessly managing cloud services in Chinese regions along with other regions around the globe. For the most part, China services through AWS are siloed from all other regions it operates in. This is a problem, and it’s something that Alibaba Cloud has taken advantage of.
Alibaba is a global niche player -- not a visionary
In 2017's Cloud IaaS Magic Quadrant, Gartner listed Alibaba Cloud in the "Visionaries" quadrant. I’ve always had issues with that since the only truly unique services they offered were for China-only markets. Thus, I see it fitting that Alibaba now occupies the "Niche Player" quadrant in 2018. This makes far more since because unless you need to have cloud services within China, it's not doing anything new or unique. That said, because of the multicloud strategy movement within enterprise IT, and because of China's and greater-Asia’s massive growth for cloud services, Alibaba should be recognized as a top contender from a global viewpoint.
About the Author(s)
President & Lead Network Architect, West Gate Networks
Andrew has well over a decade of enterprise networking under his belt through his consulting practice, which specializes in enterprise network architectures and datacenter build-outs and prior experience at organizations such as State Farm Insurance, United Airlines and the University of Chicago Medical Center. Having lived and worked in South East Asia for nearly three years, Andrew possesses a unique international business and technology perspective. When he's not consulting, Andrew enjoys writing technical blogs and is the author of two Cisco certification study guides published by Sybex.
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