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The cloud services arm of Chinese e-commerce giant Alibaba is emerging as a company to watch in the Infrastructure as a Service market in the U.S., according to the latest Magic Quadrant for IaaS report from Gartner.
While Amazon Web Services maintains its runaway lead, followed by Microsoft and then Google, Alibaba Cloud is ranked fourth in terms of ability to execute.
This is the first time Alibaba Cloud has been included on the Magic Quadrant for cloud IaaS, according to CNBC.
Like Amazon, Alibaba’s primary business is e-commerce; according to a recent report by Bloomberg, Alibaba’s e-commerce business makes up more than 82 percent of sales. But Alibaba’s cloud business is growing at almost twice the rate of its core business, reaching almost $1 billion last year from $63 million in 2012.
Alibaba launched its cloud in the U.S. last year, and has been adding data centers to grow its infrastructure footprint. This week it announced at a conference in Shanghai plans to open data centers in India and Indonesia by March 31, 2018.
According to Gartner, Alibaba’s international offering does not have the same features or level of performance as its China offering, which could hurt its reputation and growth prospects in the U.S. In addition, it “has very little in the way of unique differentiation compared to other hyperscale providers”, taking “liberal inspiration from competitors when developing service capabilities and branding.”
Also, customers in the U.S. could be hesitant to select Alibaba because it is a Chinese company, Gartner says, and there are concerns around controversial legislation such as its Cybersecurity Law, which went into force this month.
Gartner said that AWS is most commonly used for strategic, organization wide adoption, while Microsoft is seen as more of a strategic enterprise cloud partner, according to a report by ZDNet. Google, on the other hand, is a good option for cloud-native companies.
An April report from Synergy Research said that in Q1 2017, Microsoft, Google and Alibaba achieved annual growth rates exceeding 80 percent.