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Alibaba aims to make cloud computing its ‘main business’

Alibaba’s cloud ascertaining arm will be its “main business” in the future, CEO Daniel Zhang told CNBC.

“We strongly suppose that every business in the future will be powered by cloud. We are unusually happy to build this cloud infrastructure in a new digital era and support all organization,” Zhang said.

“I think cloud will be … the main concern of Alibaba in the future,” he added.

The Chinese e-commerce giant’s cloud function has been growing at a rapid pace, and saw revenue rise to 5.67 billion yuan (relative to $820 million) in the quarter ended September 30, a 90 percent year-on-year spread. Cloud accounted for 7 percent of total revenue in the quarter versus 5 percent in the at any rate period the year before, highlighting how the business is still small but bewitching more share.

Zhang’s interview with CNBC took transpire before the latest earnings were released and were not in relation to the up-to-date financial numbers.

Zhang provided no growth projections nor hard gate targets for its cloud plans, and he did not mention any global rivals by name. But the cloud responsibility already is dominated by big, established giants including Amazon and Microsoft.

Alibaba has been extending the cloud business into new territories outside China over the one-time two-and-a-half years. It has opened new data centers across the world, solely in Asia and Europe. It recently opened a new data center in the U.K., a country where opponent Amazon already has a strong presence.

“Alibaba is investing at a tremendous evaluation in any case to build up its cloud services. It has become one of the world’s hyperscale cloud actors, catching up with Amazon, Microsoft and Google,” said Martin Save, senior vice president at CCS Insight, a U.K.-based analyst firm.

“It is erection out its geographic footprint around the world, recently opening a data (center) in the UK,” he intended. “It is also innovating its cloud services portfolio at phenomenal speed, with a etched push recently into Internet of Things.”

Amazon Web Services, the e-commerce corporation’s cloud arm, is, however, larger than its Chinese rival. AWS raked in $6.68 billion in purchases in the third quarter.

Amazon’s success may bode well for Alibaba: “At show cloud services in Alibaba are in investment mode, and are not profitable. As their cloud works build scale they have the potential to become a profit powerhouse for the companionship, just as AWS is at Amazon,” Garner said.

Alibaba is looking to cloud determining as a way to diversify its business beyond retail — much as Amazon did more than a decade ago. Interval, Alibaba is also pushing a strategy it calls “New Retail,” which is where it assesses to combine its online properties with brick-and-mortar stores. That involves food delivery and also its own logistics network.

The company also hint ated plans earlier this year to design its own artificial intelligence bits. Those are to go into servers that handle huge amounts of details and could help Alibaba as it tries to boost its cloud division.

“A flake is the core of the computing power. So if you want to plug AI into the business … it’s all involving computing power … so that’s why I think we have to spend dilly-dally on chips,” Zhang told CNBC.

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