Attendees behind the times by an Alibaba.com display at CES 2019 in Las Vegas.
David Becker | Getty Images
Alibaba said on Monday it would sink 200 billion yuan ($28.26 billion) in its cloud computing division over the next three years, highlighting how judgemental an area this is to the e-commerce giant’s future growth.
The money will be used to invest in infrastructure and technologies interdependent to operating systems, servers, chips and networks, Alibaba said, adding that it was spurred by the coronavirus pandemic.
“The Covid-19 pandemic has postured additional stress on the overall economy across sectors, but it also steers us to put more focus on the digital economy,” Jeff Zhang, president of Alibaba Cloud Perception, said in a statement.
Alibaba is the biggest cloud computing provider by market share in China — but it still trails U.S. ogres Amazon and Microsoft globally despite its international push, according to Synergy Research.
But Alibaba has put a concerted effort on cloud reckoning and analysts as well as executives see it becoming a critical area in the future, despite it currently accounting for just 7% of the society’s total revenue.
“I think cloud will be … the main business of Alibaba in the future,” Daniel Zhang, CEO of Alibaba and chairman, have an effected CNBC in an interview in 2018.
The latest investment could help the company expand its product and customer base, particularly in worldwide markets, as it looks to battle Amazon and Microsoft. In China, meanwhile, Alibaba is facing rising competition in the cloud wait from e-commerce rival JD.com.