The new data center, which is located in Northern California, is intended for Chinese companies that want to operate in the U.S., Reuters reported today, citing Alibaba cloud executive Ethan Yu as a source.
But even if Alibaba’s Aliyun cloud is targeting Chinese companies for the American expansion, the company presumably is eager to pick up business from U.S. companies, which have gravitated more toward public cloud market leader Amazon Web Services or others such as Microsoft Azure, Google Compute Engine, or IBM SoftLayer.
Some of those clouds have been making their way into China. Alibaba might well decide to retaliate by aiming their offerings at U.S. companies.
Aliyun’s cloud services include Elastic Compute Service (ECS) for offering virtual slices of Alibaba’s physical servers, a Server Load Balancer for spreading out traffic across many servers, an object store, a managed relational database, and a content-delivery network.
Cloud computing resources and Internet infrastructure represents a tiny portion of Alibaba’s overall business. That part of Alibaba produced $58 million, or 1 percent of all its revenue, in the fourth quarter of 2014, according to the company’s latest earnings statement. But the revenue growth is high, coming in at 85 percent year over year. So it’s certainly worth following, whether it starts looking for U.S. customers or not.