Alibaba plans to set up more data centers in overseas

Aliyun - Alibaba's cloud-computing arm - is optimistic over the development of Hong Kong's IT industry, as the city has advantages in telecommunications infrastructure and a variety of financing methods. [Photo/IC]

Alibaba Group Holding Ltd's cloud computing unit said on Wednesday it will soon open a second data center in the United States, highlighting the company's efforts to expand abroad.

Li Jin, senior product director of Aliyun Cloud Computing, said at a news conference in Beijing that the company will launch the new US center within several months, as part of the company's broad plan to be a global cloud service provider.

Li did not give details of the new center, but added that the company will set up more data centers in Singapore, Europe and Japan within a year.

Established in 2009, Aliyun accounts for only a small portion of Alibaba's business, but it has been seeing steady growth both at home and abroad.

In May, the company entered the Middle East market by setting up a joint venture with Meraas Holding LLC to provide cloud services in the region. That followed the opening in March of its first overseas data center in Silicon Valley in the US.

According to International Data Corp, public cloud services could grow into a $100 billion industry by 2017.

Gene Cao, a senior analyst at Internet consultancy Forrester Research Inc, said: "Aliyun is not competent enough to take clients from international players such as Amazon.com Inc and Microsoft Corp. Its target customers are Chinese companies that are expanding overseas."

But Aliyun has the potential to become a big service provider in the international arena of cloud computing, Cao said.

Aliyun said it will build an international content delivery network by cooperating with local partners. The network, once established, will shorten the time needed to deliver Web content from foreign countries to consumers in China and vice versa.

"We operate the largest content delivery network in China," Li said.

"But it is not enough. Going global is one of the key strategies of Alibaba. Aliyun will help realize the goal with an overseas content delivery network."

Aliyun is the largest provider of public cloud services in China where its major rival Tencent Holdings Ltd is also eyeing a piece of the lucrative business. Aliyun said it now serves more than 1.4 million customers.

Ma Si contributed to this story.