Wed. Oct 28th, 2020

The Chinese Internet holding Alibaba Group is bringing the Alibaba Cloud platform to the Russian cloud services market. To this end, the company has agreed on a partnership with the Moscow data center IXcellerate. Alibaba needs the cloud to develop its own businesses, including AliExpress Russia and its logistics partner, Cainiao. Still, in the future, other Chinese customers in Russia may also need its clouds. The pricing policy of the service is unlikely to be of interest to Russian companies, competitors say.

Alibaba Group is deploying a cloud platform Alibaba Cloud in Russia, two sources in the IT market told Kommersant. The group registered LLC Alibaba Cloud (Ru) back in November last year, and on September 24, the company received the necessary licenses from Roskomnadzor; it follows from the Kartoteka.ru database. According to one of the sources, Alibaba occupied more than half of the capital’s IXcellerate data center’s capacities, which can accommodate almost 1.5 thousand racks. Another interlocutor explains that Alibaba needs such a platform to support its growing businesses in the region – AliExpress Russia (owned by Alibaba, Mail.ru Group, MegaFon, and RDIF) its logistics partner Cainiao Network. Alibaba Group and IXcellerate declined to comment.

Alibaba Cloud is the largest cloud provider in China, with another 56 points of presence in 19 regions of the world. It operates its own e-commerce system and services for storing and processing data of third-party customers. In April, Alibaba announced that it is going to invest $ 28 billion in the development of cloud technologies in the next three years due to the growing demand for these solutions in the context of the pandemic and the transition of many companies to remote control.

Chinese cloud companies have become interested in the Russian market since last year. In February 2019, Kommersant reported that a large Internet holding Tencent placed more than 600 racks with equipment at the IXcellerate site in Moscow to comply with the data localization law and provide cloud services in Russia. Experts estimated the cost of the Tencent contract at $ 30-35 million over five years. Simultaneously, the Chinese Huawei entered the cloud market, renting 500 rack spaces in the capital’s 3Data, IXcellerate, and DataPro data centers. Several tens of millions of dollars were invested in the project. Due to the sanctions risks, the company switched to a partnership model ( see Kommersant on March 3) and transferred clients to SberCloud (owned by Sberbank). J`son & Partners Consulting estimated the entire public cloud market at the end of 2019 at 11.9 billion rubles, 29% more than in 2018.

The Russian market is overflowing with offers from Western, Asian and domestic companies, it will be difficult for new players to take a significant share, says Maxim Berezin, Development Director of CROC Cloud Services.

The cost of cloud services in Russia is much lower than the world ones. The release of Alibaba Cloud with its global price list is unlikely to arouse interest among companies in Russia, says Nikolay Bogaty, Marketing Director of SberCloud: “If colleagues want to offer Russian clients competitive prices, they will have to reduce in comparison with the world, while reducing the overall margin of the company. ” Therefore, the Russian market is unlikely to become a priority for Alibaba Cloud, he concludes.

Global cloud platforms are still noticeably superior to Russian ones in the number of services and their functionality, says Dmitry Yashin, CEO of ActiveCloud Russia (part of Softline Group).

If Alibaba places a cloud installation in a Russian data center, it has every chance to interest domestic business, he is sure. With bright marketing, aggressive pricing policy, and consistent dialogue with big business, including state-owned companies, Alibaba Cloud may well occupy 10-15% of the domestic cloud services market in several years; the expert sums up.

 

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