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Alibaba pushes its cloud services arm unit globally

Hong Kong

ALIBABA Group Holding Ltd's US$3 billion cloud services arm is fast becoming an important driver of its global expansion.

The e-commerce giant widened its lead over Amazon.com Inc and Microsoft Corp in Asia's cloud computing market in 2018, according to Gartner, which in turn helped it narrow its global gap with those two rivals.

That's helping Alibaba advance billionaire co-founder Jack Ma's vision of earning half its revenue beyond China. Alibaba's overseas cloud expansion will continue to outpace its domestic growth as the company pushes further into other countries, according to Lancelot Guo, Alibaba Cloud's vice president and head of strategy. "Internationalisation is a key strategy for Alibaba and cloud," Mr Guo said in an interview. "We want to grow even faster."

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The company declined to disclose its budget or revenue target. Mr Guo said it seeks to cater to US companies investing in China and vice versa, and that setting up data centres in Indonesia and Malaysia will help it comply with local data requirements.

The cloud business underpins Alibaba's revenue growth, helping it offset saturation in its home e-commerce arena. The overall cloud market could grow by 55 per cent to US$331.2 billion in three years, according to Gartner, and Alibaba's cloud business has been generating triple-digit revenue growth over the past three years, outpacing the industry.

Gartner estimates that Alibaba last year accounted for 19.6 per cent of the Asia region's markets for infrastructure as a service and infrastructure utility services, two of the most popular forms of cloud business.

That means its regional market share rose by nearly a third from 2017, while Amazon's fell slightly to 11 per cent. BLOOMBERG