ALEX LI, general manager of Alibaba Cloud
Chinese technology giant Alibaba is not only making big bets in India's e-commerce and payments space, but is also primed to compete in the fast-growing cloud services space. ALEX LI, general manager of Alibaba Cloud
for the APAC region, in an interview with Alnoor Peermohamed says the untapped opportunity is still huge enough to win in India. Edited excerpts:
Is Alibaba Cloud late to the game in India? How do you plan to make up for lost time?
Different companies have different strategic objectives. We don't think we're late, we're actually right on time. If you look at the Indian cloud market data from Gartner, year-over-year growth is 38 per cent and that is still huge. It's going to grow from $1.8 billion last year to $2.5 billion this year. In cloud business, the technology has been continuously evolving. So that way, Alibaba has an advantage. Also, we are doing things differently. If we were doing the same thing as them (competitors), then you're right, we're late, but we're more advanced than them.
Who are the kinds of customers you are going after in India?
In Hong Kong, you can get away by just focusing on the top 500 enterprise customers and you will be catering to the majority of the market there. But India is scattered — in Bengaluru, the start-ups and tech firms are strong; in Mumbai, the entertainment and financial services companies are big; in Delhi, the public sector and other verticals are big. We have to look at different approaches to cover these customers and have already set up a dedicated team to focus on identifying customers and to develop different models.
How is Alibaba Cloud leveraging the investments made in Indian start-ups?
We work with them very closely for their existing cloud service and we also helped them revisit their solution architecture to build up their competitiveness. It will be very comprehensive solutions from infrastructure, security and consulting to even some joint development. Back in China, we have vast experience and we want to share the same thing with our Indian investments. In the past when we were not present here, they worked with others, but as we came here they made the shift.
Do you also look at companies Alibaba has invested in as partners to acquire new customers?
Absolutely. Someone like Paytm already has a plan to add more value and provides more services to their own partners. We are working together on the programme and we are going to launch when everything is ready. This is also our unique positioning and our competitive advantage and we will leverage it.
Regulations in India are changing and forcing you to set up data centres here. Is this good or bad?
When we enter a market, we normally make a very strict policy to be compliant with the local regulations. No matter which country we enter, we follow the strictest level of compliance. In Europe you have GDPR and in Germany C5, and we follow these. In India, our investments are not based on regulations, it is based on strategy.
If you have a long term commitment, this is something you need to do.
So you're essentially saying even if India wasn't asking companies to localise their data, this data centre would have come up?
Yes. It was a demand. In the past, when the global service providers did not have data centres here, customers were still using cloud services, but they were hosting their data in Singapore or in the US or elsewhere. But today, with local data centres, they can put their data here. Not only because of the security, but because of efficiency. If we invest here, it will be because the cost as well as the latency will be lower, and the customer will benefit.
Is Alibaba Cloud looking at getting business from central and state governments in India?
We are ready to support all the sectors, including the public sector, but in the short term we're going to focus more on enterprises, SMEs and startups. We are quite strong in the business standings. We developed lot of solutions for internal use like logistics, retail, payments, e-commerce. So we want to work with customers by leveraging strengths.
Chinese firms have come under the government scanner for data privacy issues; are you facing any issues when signing up customers?
So far, this has not been there. Some customers asked us the question about data privacy, but since we have our local data centre it has not been an issue. Customers are also offered the option to pick which data centre they want to put the information in. For example, Reliance Entertainment
asked us to put their data in the US because they have a lot of customers in that region.