As a result of the growing demand for cloud software due to the corona virus outbreak that started in China and influenced the whole world, Alibaba announced that it will invest 200 billion yuan, or about 28 billion dollars in cloud services.
As a result of the growing demand for cloud software due to the corona virus outbreak that started in China and influenced the whole world, Alibaba announced that it will invest 200 billion yuan, or about 28 billion dollars in cloud services. The company said in a statement that it would spend the funds for semiconductor and operating system development and create a data center infrastructure.
While most of the white-collar employees in China were working from home in February, Alibaba, which has the largest share in the country’s cloud computing market with 46 percent, stated that the demand for software has increased, primarily DingTalk, which is used for communication purposes in businesses and schools, and Weibo, its social media application. At some point, however, users began to complain about delays in applications due to the high efficiency volume. We can say that this pushed the company to make such an investment decision.
Alibaba Cloud Intelligence President Jeff Zhang said in a statement that the COVID-19 outbreak is putting additional pressure on the overall economy across sectors, and he hopes the company will help speed up the recovery process of businesses. At this point, we should point out that Alibaba’s cloud division is one of the fastest growing businesses. Because the fourth quarter revenue increased by 62 percent to 10.7 billion yuan and exceeded 10 billion yuan for the first time in one quarter.
According to research firm Canalys, 46.4 percent of the Chinese cloud market is in the hands of Alibaba in the fourth quarter. Seeing the demand for product growth, Tencent Cloud and Baidu Cloud are 18 percent and 8.8 percent of the market, respectively. So Alibaba has a serious advantage in the cloud market.