With its recent foray in the India market, Alibaba Cloud is bullish on establishing itself strongly in the country. In line with its continued focus, the company along with its HCL will train 1,000 professionals by March 2019
Alibaba Cloud was founded in 2009 and started the service for external customers in 2013. Starting from 2014, Alibaba Cloud decided to go abroad to serve those Chinese companies who do business overseas and help foreign companies to do business in China. Alibaba Cloud has taken the leadership in China, with a strong market share of 47.6 per cent. “According to the latest report from Gartner, Alibaba Cloud is among the top three players in the world. I think this is a very big momentum for Alibaba Cloud,” says Alex Li, General Manager of Alibaba Cloud Asia Pacific.
In terms of India business, the company launched its first data centre in January 2018. Thereafter, Alibaba Cloud has spent significant amount of time to build up the team, process, and the partner ecosystem in India.
“Today, we have a very strong commitment to the India market. For the initial few years, we want to focus on a couple of areas. One is the focus on digital transformation; we want to be an expert of digital transformation. We devised the solutions from our own business transformation, because Alibaba has invested in many areas including retail, logistics, entertainment, etc. We want to put out best practices for our customers; and they are very appreciative of that,” says Li.
Strategic intent
Alibaba Cloud aims to help traditional as well as internet companies to be more competitive – this is the basic philosophy for its business growth. Furthermore, Alibaba Cloud wants to be the leading technology company. Alibaba has invested heavily in the latest technology. For example, Alibaba Cloud announced a strategic partnership with Siemens for the Industrial IoT (IIoT) business. Siemens, the leading IoT player in the world, will place all its IoT services on Alibaba Cloud platform.
Li informs, “This is definitely a very big trust for our service. Similarly we provide a lot of digital technologies in Blockchain, Machine Learning (ML), etc. Ecosystem partnership is also a key focus area. We believe that we need to partner with a lot of local players to drive digital transformation, including sales and training. We announced our strategic partnership with HCL Infosystems, wherein appointed HCL as our value added distributor in India.”
With the partnership with HCL, Alibaba expects that HCL can help in improving coverage in the country with localised service route. Alibaba has also announced its training programme, wherein it has decided to train more than 1,000 professionals in this fiscal year, by the end of March 2019. Li adds, “This is also a commitment to the market because we want to make sure we educate the market enough. We have a lot of professionals who know our product, know our solutions very well to serve the local customers.”
Elaborating more on training, Li says, “One are the sales professionals and the other are technical professionals – this will also include the education part. This is our short term strategy, but if we want to go further, we also will continue to invest in this market, to improve the network, coverage and bring more new products and solutions into the market.”
Business opportunities
For Alibaba Cloud, the India market is highly strategic in terms of market size, market potential, and talent. Citing the latest report from Gartner, Li addds that the market size for Alibaba’s cloud service is around US$ 2.5 billion. Alibaba has identified several opportunities in the market, including SMBs that need cloud services. A major proportion in the SMB space include cloud native companies, because they don’t want to invest in hardware by themselves and they don’t need to hire professional IT managers in their businesses.
“We want to offer our service to those companies to help them grow further. The startup ecosystem is very active in India for those internet-based companies in Bengaluru, Hyderabad and Mumbai. In line with this, we also have a programme to help startups from India compete with their international counterparts. Under this programme, we will select the best performer in India to compete globally. This is something that we want to work on and bring them to the prospective investors,” he informs.
Another area of opportunity for Alibaba Cloud is the internet and media industry. Internet and media are heavy users of cloud. Internet-based companies also demand good solutions, because they want to be competitive in areas like Big Data and AI. Hence, cloud-owned solutions will be critical for their processes. This also signifies that IoT is a big area for opportunities. Being heavy users of networking and storage, these companies are also Alibaba’s target to gain market share in the country.
“Furthermore, we will be focused on the traditional industries. Alibaba Cloud has launched the ET Brain, its big data solution, combined with AI and IoT. We have launched the product in Macau and Malaysia for City Brain, a smart city product, which will help government officials to manage cities much better. For example, improving transportation and traffic.The solution can automatically alert the service if there is any issue on the road. It can give a signal and message to the controllers in realtime, and also improve the congestion on roads. It can be improved up to 50 per cent, based on the differentiated situations,” comments Li.
Similarly, the company is also carrying out significant work in the retail sector – such as new retail and finance solutions, and manufacturing solutions. In the retail sector, Alibaba processes 100 million packages successfully per day. The company has more than 800 million active users globally for Ali Pay.
Commenting on business opportunities in India’s public sector, Li explains, “We focus more on the enterprises and SMEs, because the market is big enough and we are still setting up the business foundations. We are ready to serve any customer including the public sector. We will enable our partners to serve those products for the public sector. We also have seen a big opportunity to serve the digital transformation for government initiatives like the Smart Cities project. We definitely want to invest further, and we are ready to serve public customers as well.”
Market scenario
Following its interactions with IT decision makers of India Inc, Alibaba has observed that more than 84 per cent of CTOs have a plan to switch from on-premise to cloud. The company has also seen a clear trend where CIOs and CTOs are more involved in bigger business decisions and the success of the companies.
Li explains, “In this age, CIOs and CTOs have to work with their business leaders closely to bring the latest technology to drive business growth and improve profitability and customer experience. CIOs and CTOs are more business oriented now; they are working with CMOs, COOs or CEOs to drive business growth. They now have more power because of new technologies and digital transformation. Almost 100 per cent of CIOs and CTOs will give me a chance to talk about the latest technology and our solution. Everyone wants to know how Alibaba Cloud can help them.”
Alibaba Cloud is still considered a newcomer in the market. Whereas, other players are already established for years. However, Li remarks that the growth of the established players has happened in the past one to three years. Prior to the launch of its data centre in India, Alibaba Cloud already had a lot of Indian customers, receiving products and services from Singapore, the US or Middle East, etc. He believes that Alibaba Cloud has a good ground work for the future.
Speaking on the differentiating factors, Li says, “Alibaba Cloud has a strong presence in Asia Pacific, particularly in China and South East Asian countries. In China, our market share is the highest, and we enjoy the second largest market share in Indonesia. In Malaysia, Alibaba Cloud is the only global service provider to setup a data centre. If you look at Asia Pacific, in Japan along with India, Hong Kong, and Singapore, we have large infrastructure and comprehensive product portfolio to serve our customers. For those Indian customers who want to do business in China, Asia Pacific or the Middle East, Alibaba will be a good choice. In terms of products and solutions, we have unique solutions like ET Brain. We have the latest technology for IoT and Blockchain. Those solutions are popular among Indian customers as well. We want to be the most friendly vendor for our ecosystem of partners. We are working towards building a competitive channel structure along with good incentive programmes to ensure our partners’ profitability.”
Partner focus
Asia Pacific, being a large geography, different countries vary in terms of business strategies. For instance, in Singapore and Hong Kong, the market is relatively small in terms of the territory. Thus it will not be fruitful to invest in a distributor in such markets. “We normally develop system integrators to help us. We have many service partners who can help us work with customers for migration, new solutions and making a structure, etc. India has a vast geography and the market is scattered. Hence, in order to cover the growing segments, we have to develop different-go-to market strategies, which is the reason we have a distributor in India. Additionally, we also need specialised consulting companies like KPMG who can work together with us. This is the way for us to look at alternatives. All of our channel and go-to-market strategies will stem from the customer’s requirements. We need partners to help us with system integration,” he says.
Moreover, another key factor behind strategy formation and selection of the partners is their capabilities. Alibaba requires their partners to have a strong cloud background; the company looks at whether the partners have practice, customer base and the required techniques.
Li states, “Digital transformation is not only for customers; it is also for partners. For example HCL Infosystems, three to five years ago, was absolutely strong in hardware, IT products and after-sales service. In the past two years, HCL has transformed to cloud as well. They have their own enterprise team and have trained their channel sales team. HCL not only caters to traditional partners, but also has a lot of cloud-native resellers under the system.”
Aimed at training and enablement of partners, Alibaba Cloud has been running programmess for solutions like Big Data. The company also works closely with its customers to review their pipeline.
“We have launched incentive programmes to win partners who have been working with other players, but at the end, it is the partner’s choice. Alibaba Cloud will be the best choice if they want to win together in the future. We will add value to our partners and their customers. We also look at multi cloud service,” he concludes.
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