Alibaba (BABA) to Boost Global Cloud Reach With Price Cut Move

April 27, 2024

22 2 minutes read

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Alibaba BABA adopts a price-cut strategy in a bid to expand its market share in the global cloud-computing space.

Recently, Alibaba Cloud slashed prices for international customers from the United States to Singapore by up to 59%.

As a result, there is an average reduction of 23% across five categories — compute, storage, network, database and big data products — for customers using Alibaba’s data centers out of mainland China.

These discounts are currently available across 13 regions, including Japan, Indonesia, the U.A.E. and Germany.

Alibaba strives to capitalize on the growing cloud demand, driven by the growing proliferation of generative AI on the back of its underlined strategy.

The latest move is expected to boost its customer base, which, in turn, will drive growth in Alibaba Cloud revenues in the days ahead.

In addition, Alibaba’s strong cloud services portfolio, powered by advanced technologies like AI, generative AI, Machine Learning and the Internet of Things, is expected to continue aiding it in addressing the rising demand for cloud architecture.

Competitive Angle to Note

The price cut move is expected to help the cloud giant of China compete well in the global cloud market.

However, rising competition from big players in the market is a major concern. Growth of Alibaba in the global cloud market has been hindered by the solid momentum of the leading cloud players, namely Amazon AMZN, Microsoft MSFT and Alphabet’s GOOGL Google.

These three companies are constantly making endeavors to power their cloud offerings with generative AI technology. While Amazon Web Service (“AWS”) continues to ride on the integration of Amazon Bedrock, which has provided it with a breakthrough in the generative AI space, Microsoft Azure and Google Cloud are making strides with OpenAI models and Gemini, respectively.

Expanding data center networks and an increasing number of cloud regions and availability zones are also driving the customer momentum of these companies.

Currently, AWS has 105 Availability Zones across 33 geographic regions. It plans to launch 15 more Availability Zones and five more AWS Regions in Malaysia, Mexico, New Zealand, Thailand and the AWS European Sovereign Cloud.

Then again, Azure is operating in more than 60 cloud regions at present.

Meanwhile, the total number of Google Cloud regions is currently 39, with 118 zones and 187 network edge locations. The company intends to further expand its cloud region network in Doha (Qatar), Berlin (Germany), Dammam (the Kingdom of Saudi Arabia) and Queretaro (Mexico). Also, it is preparing to open cloud regions in Mexico, Malaysia, Thailand, New Zealand, Greece, Norway, South Africa, Austria and Sweden.

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