Dallas, Texas 06/08/2015 (Financialstrend) – Alibaba Group Holding Ltd (NYSE:BABA) is not relenting on its push to take Amazon.com, Inc. (NASDAQ:AMZN) head on, in the cloud business. The Chinese e-commerce giant continues to bolster its cloud offerings as it moves to make its presence felt in the business. The signing of deals with the likes of Intel is just a confirmation of how committed the e-commerce giant is.
Alibaba Cost Savings
Unlike other companies that are forced to build data centers from scratch, partnerships are enabling Alibaba to save a great deal on the same. The partnership with Intel allows the e-commerce giant to use the former’s data centers to host its cloud services.
Alibaba Group Holding Ltd (NYSE:BABA) has already sealed partnerships with seven key players in the data center business. The partnerships allow it to have a big presence in some of the key markets that Amazon currently operates. However, it is not going to be easy to dethrone some of the giants that have already built their reputation in some of the key markets.
Competition Threat
Amazon, Google Inc (NASDAQ:GOOGL) and Microsoft Corporation (NASDAQ:MSFT) still hold the upper hand in the cloud business. Alibaba being a Chinese company is sure to experience some resentment especially among consumers who remain skeptical about the Chinese government.
Competition can only be stiff going forward as all the companies try to accrue a substantial amount of market share. The company has already reiterated that it is not scared of the level of competition in the space as it believes it can compete better on the pricing front.
Revenue from the cloud business has been growing even though it still makes a fraction of the company’s total revenue. The cloud business presents a perfect opportunity for Alibaba Group Holding Ltd (NYSE:BABA) to expand its wings outside China. However, the company still has a long way to go if revenues from the business are to have any impact on its total earnings.
