AlibabaCloud has the chance to own the ASEAN Cloud Market


The cloud in the Asia Pacific region has had considerable build up in the past two years. In the major markets, all of the hyper-scale providers are present or have announced intentions. As a result, Australia, India, Japan, Korea and Singapore are well covered. Multiple delivery models exist, hybrid and multi clouds are the delivery offering of choice. AWS and Azure have clear leadership, Google has promised to invest more heavily.

In smaller Asia Pacific markets the depth, scope and maturity of offerings are less consistent. For some markets, this is not an impediment, New Zealand, in particular, is thriving across all cloud models despite not having any hyper-scale presence on the ground. Hong Kong has good choices, often as a proxy to China access. For other markets, there is no presence and the option to have one of the US hyper-scale providers invest is limited. capioIT first wrote about this in 2017. ASEAN leads the opportunity for redefining Cloud Infrastructure Locations

Countries such as Indonesia and Thailand are due for more cloud platform investment. The consumer-driven opportunity in ASEAN should be enough to drive further investment, despite some troubles that exist. They are keen to move to the cloud to enjoy the benefits of the platform but have limited scale and secure option. It does not look like a business model will come from Microsoft, AWS or Google to meet there needs. That leaves Alibaba to be the saviour. It recently announced a second node in Malaysia; it already has a fledgeling Indonesian presence. The Philippines and Thailand are not far behind. It would not surprise that the likes of Vietnam are on the roadmap as well.

This early mover advantage from a geographic perspective is going to drive success for AlibabaCloud. There is not the market opportunity in the current demand and delivery models for more than two hyper-scale providers in these markets, so the advantage of the first mover is amplified.

It also reflects a growing investment from Chinese firms in these markets. China is Indonesia’s largest trading partner and is the third largest FDI contributor after Singapore and Japan. Thailand, although lagging as an FDI source, is a crucial trading partner. While there is some resentment in parts of the countries to the growth in Chinese investment, they have pragmatism, and the broader role of the likes of Alibaba make it difficult to stop. AlibabaCloud should not stop at ASEAN, globally there are many potential markets to enable it to develop scale in Latin America, the Middle East, Africa and Eastern Europe.

It is also worth noting how few people fully understand the size scope and scale of Alibaba and Tencent. AliPay and WeChat are dominant platforms in China, and they will continue to stretch that domination globally. While the Chinese experience will not be immediately replicated, the scale and growth are spectacular.

Capture Point

Mid-sized economies have struggled to get hyper-scale investment in cloud odes and location despite growing interest in the cloud. AlibabaCloud has the scale and capital support from China to undertake early mover investment, particularly in the ASEAN region. This will enable it to support Chinese and domestic organisations as they shift to cloud and will force the US-based hyper-vendors to change their business model to be agiler and suited to emerging markets. If it plays out, then the customer is the winner.

About capioIT - Phil Hassey

If you require further information, please contact Phil Hassey, CEO of capioIT. capioIT is an advisory firm focused on helping organisations to understand emerging technology as the world becomes Digital. Phil may be contacted easily in the digital and real world. phil@capioit.com +61422231793
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