Why Alibaba Cloud is doubling down in Southeast Asia
Alibaba has announced expansion of its cloud business within Southeast Asia, with the introduction of a digital upskilling programme for locals alongside acceleration of its data centre openings.
This doubling down of its cloud business in Southeast Asia comes as the company faces stiff competition at home in China from rivals including Pinduoduo Inc and Tencent and seeks to up its game in a region considered to be the fastest-growing in cloud adoption to compete with leading global cloud providers AWS, Google and Microsoft.
Alibaba Cloud, the cloud computing arm of Chinese e-commerce giant Alibaba and second biggest revenue driver after its core e-commerce business, finally turned profitable for the first time in the December 2020 following 11 years of operation, thanks largely to the pandemic which has spurred businesses and consumers to get online.
Southeast Asia growing demand for cloud
In 2020, there was a noticeable increase in interest towards cloud in SE Asia, with the population embracing digital transformation during the pandemic and SMEs across the region showing increased demand for cloud computing.
Such demand has led to the expectation that Southeast Asia is now the fastest-growing adopter of cloud computing with the cloud market expected to reach US$40.32bn in Southeast Asia by 2025 according to IDC.
And there are plenty of players vying for a slice of the cloud pie. While AWS, the cloud arm of Amazon, is the leading player in Southeast Asia (and across all of APAC apart from China), Microsoft and Google are the next two most dominant players in Southeast Asia with Alibaba coming in fourth.
“There is no doubt that during the past year we have seen the acceleration of digital transformation efforts across all industries,” explains Ahmed Mazhari, President, Microsoft Asia. “Asia now accounts for 60% of the world’s growth and is leading the global recovery with the digitalization of business models and economies. Cloud will continue to be a core foundation empowering the realization of Asia’s ambitions, enabling co-innovation across industries, government and community, to drive inclusive societal progress.”
Alibaba’s commitment to Southeast Asia
At its annual Alibaba Cloud Summit, the Chinese company announced Project AsiaForward, an initiative designed to upskill local developers, small-to-medium-sized companies and connect businesses with venture capital. Alibaba said it would set aside US$1bn over the next three years to develop digital skills in the region, with the aim of helping to develop 100,000 developers and to help grow 100,000 tech startups.
But that’s not all. The company, which recently opened its third data centre in Indonesia, serving customers with offerings across database, security, network, machine learning and data analytics services, also announced it would unveil its first data centre in the Philippines by the end of 2021.
Furthermore, that it would establish its first international innovation centre, located in Malaysia, offering a one-stop shop platform for Malaysian SMEs, startups and developers to innovate in emerging technologies.
“We are seeing a strong demand for cloud-native technologies in emerging verticals across the region, from e-commerce and logistics platforms to FinTech and online entertainment. As the leading cloud service provider and trusted partner in APAC, we are committed to bettering the region’s cloud ecosystem and enhancing its digital infrastructure,” says Jeff Zhang, President, Alibaba Cloud Intelligence.
What other cloud providers are pledging in the region
This pledge by Alibaba to upskill both individuals and businesses follows Microsoft’s announcement in April that it was planning to upskill Malaysia’s population and would invest US$1bn over the next five years to build a new data centre centre in Malaysia.
This is the latest in a long line of pledges to the region by the US tech giant, which is fast accelerating the growth of its cloud datacenter footprint in Asia, expanding form seven 11 markets, and recently adding three new markets across Asia – Malaysia, Indonesia and Taiwan. Back in February, it announced plans to establish its first datacenter region in Indonesia and to skill an additional 3 million Indonesians to achieve its goal of empowering over 24 million Indonesians by the end of 2021.
And recent research by IDC shows that Microsoft’s most recent datacenter expansions in Malaysia, Indonesia and Taiwan alone are set to generate more than US$21bn in new revenues and will create 100,000 new jobs in the next four years.
Also last month, Tencent announced it has launched internet data centres in Bangkok, Hong Kong, Tokyo to add to its second availability zone opened in Korea last year and plans to add an internet data center in Indonesia, and Google has also been pushing into the enterprise space in Southeast Asia for several years now.
Expanding data centers allows cloud providers to boost their capacity in certain countries or regions.
First Solar to Invest US$684mn in Indian Energy Sector
First Solar is about to set up a new photovoltaic (PV) thin-film solar manufacturing facility in Tamil Nadu, India. The 3.3GW factory will create 1,000 skilled jobs and is expected to launch its operations in Q3 of 2023. According to the company, India needs 25+ gigawatts of solar energy to be deployed each year for the next nine years. This means that many of First Solar’s Indian clients will jump at the chance to have access to the company’s advanced PV.
Said Mark Widmar, First Solar’s CEO: ‘India is an attractive market for First Solar not simply because our module technology is advantageous in its hot, humid climate. It’s an inherently sustainable market, underpinned by a growing economy and appetite for energy’.
A Bit of Background
First Solar is a leading global provider of photovoltaic systems. It uses advanced technology to generate clear, reliable energy around the world. And even though it’s headquartered in the US, the company has invested in storage facilities around the world. It displaced energy requirements for a desalination plant in Australia, launched a source of reliable energy in the Middle East (Dubai, UAE), and deployed over 4.5GW of energy across Europe with its First Solar modules.
The company is also known for its solar innovation, reporting that it sees gains in efficiency three times faster than multi-crystalline silicon technology. First Solar holds world records in thin-film cell conversion efficiency (22.1%) and module conversion efficiency (18.2%). Finally, it helps its partners develop, finance, design, construct, and operate PV power plants—which is exactly what we’re talking about.
How Will The Tamil Nadu Plant Work?
Tamil Nadu will use the same manufacturing template as First Solar’s new Ohio factory. According to the Times of India, the factory will combine skilled workers, artificial intelligence, machine-to-machine communication, and IoT connectivity. In addition, its operations will adhere to First Solar’s Responsible Sourcing Solar Principles, produce modules with a 2.5x lower carbon footprint, and help India become energy-independent. Said Widmar: ‘Our advanced PV module will be made in India, for India’.
After all, we must mention that part of First Solar’s motivation in Tamil Nadu is to ensure that India doesn’t rely on Chinese solar. ‘India stands apart in the decisiveness of its response to China’s strategy of state-subsidised global dominance of the crystalline silicon supply chain’, Widmar explained. ‘That’s precisely the kind of level playing field needed for non-Chinese solar manufacturers to compete on their own merits’.
According to First Solar, India’s model should be a template for like-minded nations. Widmar added: ‘We’re pleased to support the sustainable energy ambitions of a major US ally in the Asia-Pacific region—with American-designed solar technology’. To sum up: Indian solar power is yet the next development in the China-US trade war. Let the PV manufacturing begin.