As Jack Ma, founder of Alibaba, announced the strategy of “cloud app”, the two global giants in e-commerce – Alibaba and Amazon confronted with each other in cloud service.
In Beijing office, AWS (Amazon Web Service) China was fighting for their goal in the first quarter of 2014: the first batch of Chinese clients will be invited to try AWS in China. Not long ago, AWS declared its entering into Chinese market.
In Hangzhou, headquarter of Alibaba, Jack Ma gave a careful consideration during 2014 Spring Festival and decided not to focus on the wins and losses on mobile terminal at one time. “Alibaba should lay emphasis on cloud service, and cloud app will be the star of future mobile market.”
Alibaba made quick moves about cloud service in a week: On February 24, Alibaba allied with Neusoft (the biggest Chinese multinational provider of software engineering services, IT services, etc.) to develop cloud service; On February 27, Alibaba invested in Hainan Province to build a “Future City”; On March 1, Jack Ma flew to Guizhou Province to start business in cloud service.
Since the set up of “cloud computing center” in 2008, the status of cloud service in Alibaba has never been so important. Except for internet finance, it could raise the capital market’s expectation of Alibaba; compared with other enterprises such as Tencent, cloud service targeting small and medium enterprises is suitable to the advantage of Alibaba which are big data and platform.
In technology, two things were notable. One was in July 2013, Alibaba completed a three year plan of “de-IOE”, in other words, not using IBM minicomputers, Oracle Database and EMC storage. Alibaba used computer cluster of low cost PC to build supercomputer, which was the first Chinese internet enterprise to fulfill “de-IOE”. In October 2013, Alibaba finished its 5K plan independently, with a single cluster servers of 5000 computers to complete 100 TB sorting in merely 30 mins. It beat Yahoo’s record in July 2013 of 71 mins. Ali Cloud became the first enterprise to offer 5K cloud computing service.
AWS In China
AWS was launched in 2006, offer IT services and grew to be the number one in global cloud computing. Amazon announced on December 18 in 2013 to enter into Chinese market, the tenth of AWS in global market. Meanwhile, Ali Cloud and Tencent Cloud gave 40% or 50% off when AWS entered China. Besides AWS, Micosoft Cloud also came to China in 2013 and IBM planned to develop cloud computing as well.
AWS is invincible in global market, Amazon is going to conquer Chinese market. China market means everything for Alibaba, therefore it lowered its price by 30%, invested 100 million yuan (USD 16.27 million) to cultivate partners and tried to expand Ali Cloud to overseas market in 2014. It is said that “Alibaba wants to be the Amazon of China, while Amazon wants to be the Amazon of China.”
Comparisons of AWS and Ali Cloud
Cloud computing’s biggest advantage is cheap price. AWS’s annual service of single-core CPU and 2G RAM costs 3,530 yuan (USD 574), Ali Cloud costs 2,368 yuan (USD 385). Dual-core CPU and 8G RAM of AWS costs 14,212 (USD 2,312), while Ali Cloud only costs 6,452 yuan (USD 1,049).
Though AWS is generally better than Ali Cloud in technology, but in China, Ali Cloud’s performance beats AWS.
In Cloud Services, AWS accumulated a series of products, such as AWS IAM, Cloud Watch and CDN, etc. Their clients could have a complete solution. Alibaba announced that they would beta-launch its mobile cloud platform in the middle of March 2014, aimed at providing one-stop solution for clients.
On Christmas Eve of 2012, Netflix users could not watch videos because of Netflix cloud provider AWS data center broke down. That was the third time AWS broke down. Ali Cloud had few big clients, so there was no break down of this kind happened before. As the biggest e-commerce enterprise in China, Alibaba faced severe challenge of traffic peak during Double 11.
Amazon’s data center has the cutting-edge advantage in global, however, Alibaba is in control of scarce resources in China. Alibaba set up data centers in Hangzhou, Beijing and Qingdao, and is currently building data centers in Inner Mongolia and overseas.
AWS intended to cooperate with Chinese CDN enterprise Wangsu to avoid high expenses of purchasing BGP (Boarder Gateway Protocol). Another problem laid in front of Amazon is the regulation from Chinese government.