Alibaba Opens Second US Data Center in Billion Dollar Cloud Investment

Shuang Shan

Alibaba Group Holding Limited’s cloud computing arm AliCloud opened its second Silicon Valley data center on October 9 as part of the e-commerce giant’s billion-dollar investment in its cloud computing business. The data center will help Chinese companies expand in the United States, while allowing Alibaba to offer its cloud computing service to US customers. The location of the new data center has not being disclosed.

The data center is AliCloud’s second data center in the United States and ninth in the world. AliCloud opened its first Silicon Valley data center in March 2015, followed by a $1 billion investment to expand its cloud services abroad. Despite an annual growth rate of over 100 percent, AliCloud currently contributes only a small portion of Alibaba’s total revenue—about 1.5% percent as of March 31, 2014.

Alibaba hopes that expanding cloud computing services will not only serve the data processing needs of its own e-commerce sites (processing $500 billion worth of orders this year), but also help it get a cut of the $120 billion global cloud-computing market. A leader in Chinese cloud computing through web hosting of small and medium merchandisers, Alibaba competes globally against strong rivals including Amazon.com Inc., whose Amazon Web Services occupies 28 percent of the global market share, reports Synergy Research Group.

(Photo by Leon Lee via Flickr)