Opinion

Alibaba Cloud Will Ride on Innovations in Artificial Intelligence, IoT and Big Data Analytics: Simon Hu

Alibaba Cloud is the group’s next best bet for growth after the success of its ecommerce and financial businesses in both China and outside. At the recently held The Computing Conference in Hangzhou, China, Alibaba Cloud showcased some really unique use-cases, from a diverse set of companies across the world, depicting how it is leveraging the new digital technologies to solve the unique problems of its customers.

During a common press briefing held at the Alibaba Cloud Town in Hangzhou, Simon Hu, Senior Vice President, Alibaba Group and President, Alibaba Cloud gave a comprehensive view of company’s roadmap to harness emerging technologies to solve the business challenges of enterprises.

Below are the excerpts from the briefing:

DynamicCIO (DC): What’s Alibaba’s focus in this digitally emerging world and how is the company using the emerging technologies (ET) to solve some of the complex business challenges?

Simon Hu (SH): Globally most companies, across verticals, are today interested in experimenting with new technology to enable a new future for themselves. The emerging technologies that we talk about e.g. Artificial Intelligence, Cloud, IoT and Big Data Analytics, can open immense possibilities. Digital transformation is now out of hype cycle and organisations globally are mainstreaming it as their key growth enabler. At Alibaba, Cloud is not considered as a technology; it’s a new way of thinking. We firmly believe companies will reap great benefits by adopting Cloud and solutions based on Cloud. Similarly, Big Data, AI and IoT will also help in industrial upgrade and thus enable companies in providing a better customer/user experience. Industries today don’t just want a mundane software. They want to unlock new opportunities, ignite innovation and bring in reforms using the new tech. Alibaba Cloud is focused on all the emerging technologies and is engaged with customers globally to develop solutions, along with our partner ecosystem, to help solve some of the most complex issues facing business, societies and governments.

DC: How has Alibaba Cloud evolved over the years and what’s the plan to grow business outside China?

SH: Alibaba Cloud was established in 2009. Besides being the largest provider of public cloud services in China, we are now among the world’s top three IaaS (Infrastructure as a Service) providers. We are placed in the “visionary category” in Gartner’s “Magic Quadrant for Cloud Infrastructure as a Service (IaaS) in its 2017 MQ report.

As an organisation, we are committed to seek continuous innovation. We are very closely working with industries both in china and outside to develop unique use-cases. Technology also has been improving. Through APIs, through our open innovation, we have developed many proven solutions like ET City Brain, ET Industrial Brain, ET Medical Brain, ET Environment Brain and ET Aviation Brain offering an array of services to our clients in enterprise, city administration and other industries. Today Alibaba cloud is respected amongst the internet giants in the US. The fact that we have been promoting Internet innovation in China for over 20 years, we would like to replicate the same in other parts of the world through a wider footprint.

DC: While Alibaba Cloud is the number three IaaS player, it has a lot to catch up with the top players like AWS Cloud, Microsoft Azure, and Google Cloud. What’s the strategy of the company to compete with the incumbent cloud giants?

SH: Investing in the future of cloud and its extensions is one of the top priorities for our group. At Alibaba Cloud, our aim is to provide infrastructure to the customers with a mission to simplify their business. We are going global in every aspect of business. Our Chairman Jack Ma and the newly appointed CEO Daniel Zhang have no hesitation when it comes to investing in the future of Cloud. The fact is that we are under no pressure to generate revenue right now. The key focus for us is to provide more value to customers and that’s what we are trying to do.

In 2016 Jack Ma had proposed 5 news – new retail, new energy, new finance, new manufacturing and new technology. Except manufacturing, the other four new(s) are doing well. We need to leverage data to improve the new manufacturing. Demand-based production or flexible production has to be the new normal for manufacturing. IPv6 development enables us to work on new possibilities for the manufacturing industry. We are seeing and incorporating the supply chain reforms. Big data and IoT will enable flexible production and production on demand. We are able to connect retail with manufacturing.

There is a lot that Alibaba is doing to not only catch up with the competition but also offer customers technology platform that other cloud players don’t have.

DC: There was an announcement for the availability of SAP HANA on Alibaba Cloud. How is your relationship with SAP consolidating?

SH: We are in a strategic partnership with SAP since 2016. The recent announcement further consolidates our already strong partnership. We are a preferred service provider to SAP. The core products of SAP S4 HANA will be hosted on Alibaba Cloud. Both Alibaba and SAP will co-develop the market in different geographies and for doing so, we will leverage each other’s expertise. This combination is destined to create value for customers. Focus for both SAP and Alibaba is to launch new products and innovations together both in the APAC region and other regions too.

As part of this agreement, SAP will continue to employ Alibaba Cloud’s technology, while Alibaba will adopt S/4HANA software to drive its own business models. The two companies will explore further collaboration in areas around artificial intelligence, IoT, digital retail and manufacturing. Alibaba will also launch “SAP Cloud Platform as a Service” in China, using its Cloud infrastructure. Our customers will be able to deploy SAP Cloud Platform to extend their current business solutions, build new applications and integrate third-party technologies.

DC: Data security and local privacy laws have always been the top challenge for Cloud infrastructure providers. How is Alibaba addressing this issue?

SH: For any Internet company or MNC that offers cloud infrastructure as a service at a global scale, it is important to respect the local data privacy laws and regulations. In this age, the laws are stringent and there is no way to bypass or escape them. Alibaba is now present in over 24 countries and we are a responsible company. We fully comply with the local laws and regulations. We also know how difficult it is for a Chinese company to provide services in global markets because of the trust deficit issues. That’s probably one of the reasons why Alibaba has decided to bring 50% of its growth from overseas market and gain both mindshare and market share.

To that effect, wherever we offer services, we first acquire all necessary legal certifications and insist a lot on localisation. For example, we established in India two years ago and we already have a local data centre that is fully compliant with local data protection policies. India’s data is stored in the Indian data centre. We did it very differently as opposed to our competitors. We promoted localisation of data and thus maintain data privacy.

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