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Alibaba plans to invest $1B in cloud unit to take on Amazon

Jul. 29, 2015 1:44 PM ETAmazon.com, Inc. (AMZN) StockAMZN, BABABy: Eric Jhonsa, SA News Editor10 Comments
  • "Our goal is to overtake Amazon (NASDAQ:AMZN) in four years, whether that's in customers, technology, or worldwide scale," states Simon Hu, the president of Alibaba's (BABA -0.2%) Aliyun cloud infrastructure (IaaS) services unit.
  • The remarks, along with Alibaba's commitment to invest $1B to further its goal, follow the March launch of a Silicon Valley data center. Though a major player in the Chinese IaaS market, Alibaba has a limited overseas presence.
  • Surpassing Amazon could be a tall order: While Alibaba had FY15 (ended in March) cloud computing/Internet infrastructure revenue of $205M (+64% Y/Y), Amazon Web Services (AWS) had revenue of $5.98B (+56% Y/Y) over the 12 months ending June 30. Amazon announced in late 2013 it's entering the Chinese IaaS market through a limited preview.
  • Both companies participate in a cloud infrastructure service market estimated by Synergy Research to be worth over $16B (+48% Y/Y) last year. Microsoft, IBM, and Google are also noteworthy players.

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