Alibaba Cloud to Launch Data Centers in India, Indonesia

Two years ago, Alibaba Cloud’s President Simon Hu declared, "Our goal is to overtake Amazon in four years, whether that’s in customers, technology, or worldwide scale.”

The cloud computing arm of the China-based e-commerce giant Alibaba announced at its Computing Conference this week in Shanghai that it plans to launch data centers in Mumbai and Jakarta in a move certainly in that direction.

The decision to expand in Indonesia goes hand-in-hand with the country's 1,000 Start-ups Movement initiative launched last year, aimed at establishing 1,000 ventures by 2020, with a target cumulative valuation of $10 billion.

Alibaba said it anticipates that both India and Indonesia data centers will open during the current fiscal year, ending on March 31, 2018.

Together with the recently announced data center in Malaysia, Alibaba Cloud will significantly increase its computing resources in Asia. When the three new facilities open, the total number of locations will grow to 17, covering mainland China, Australia, Germany, Japan, Hong Kong, Singapore, the United Arab Emirates, and the US.

"I believe Alibaba Cloud, as the only global cloud services provider originating from Asia, is uniquely positioned with cultural and contextual advantages to provide innovative data intelligence and computing capabilities to customers in this region. Establishing data centers in India and Indonesia will further strengthen our position in the region and across the globe," Hu said in a statement.

According to Synergy Research Group, Alibaba is sixth in the world behind AWS, Microsoft, Google, IBM and Salesforce in infrastructure, platform and hosted private cloud services (not including Salesforce’s more substantial SaaS business).

Alibaba entered the cloud computing business in 2009, just three years after Amazon launched its cloud division, AWS — and Alibaba’s cloud computing effort is one of the most ambitious projects the Chinese e-commerce giant is pursuing.

It comes at a time when China continues to create more and more restrictions on US-based cloud providers. China’s controversial Cyber Security Law went into effect on June 1 and is creating Excedrin-size headaches for some of Silicon Valley’s giants and others, wanting to remain in or expand to the country.

This particular law is controversial on a few fronts: First, it requires that foreign companies store data only on servers in China. This condition could handcuff multinationals accustomed to a global internet computing environment.

Additionally, only technology deemed “secure” can be employed; and if officials suspect any wrongdoing, foreign entities must cooperate with investigations. That includes giving the government full access to data. Many fear the law will grant Beijing an unprecedented and uncomfortable level of access to others’ data.

A further requirement regarding certification could mean technology companies will be asked to provide source code, encryption or other critical intellectual property for review by security authorities.

It’s yet another move by the Chinese government that, regardless of intent, gives local favorites like Alibaba Group an edge. The company's cloud customers doubled in the final quarter of 2016, Bloomberg reported.

Only time will tell if the move by China adds customers to Alibaba's coffers and takes them away from US competitors.

On a side note, Alibaba Cloud also announced that it has established a global partnership with Tata Communications, which will provide direct access to Alibaba Cloud Express Connect via Tata Communications' IZOTM Private Connect service.