Alibaba Cloud's EMEA boss on the five UK verticals it's gunning for
Cloud provider's EMEA GM Yeming Wang tells CRN how the Chinese vendor is shaping up in the West
It's no secret that we tend to fear what we don't understand. With that in mind, Alibaba's steady, underplayed entrance into the EMEA market has left many intrigued.
Very rarely will such a colossal tech firm, which is both consumer and business focused, be such an unknown quantity in Europe. After all, Alibaba is listed on the New York Stock Exchange and turned over $40bn (£31.4bn) in its last financial year.
But its numbers show why its reputation in Europe is skewed compared with its unrivalled status in Asia.
Its Chinese e-commerce business turned over $29.2bn in the year ending 31 March 2018, while its international e-commerce business, which is still largely focused on Asia, brought in $3.4bn.
Until recently, Alibaba has kept a relatively low profile in Europe and the UK. It has been operating a datacentre in Frankfurt since 2016, but quietly made plans for a London datacentre known on its website last September.
An official launch followed in October, but CRN sat down with Yeming Wang, Alibaba Cloud's EMEA general manager, at the end of the year to delve into the vendor's plans for the UK market and the channel.
The mere fact that Alibaba is a Chinese company entering a market dominated by US players has written its own headlines - but the firm's plan is more meticulous than just snatching market share from Microsoft and Amazon.
"We emphasise that we need to play like a vertical business cloud," Wang explained. "Our approach is very business orientated and not purely on the infrastructure.
"We are focusing on five verticals - finance, retail, logistics, manufacturing and media - and the reason we chose them is because we support the internal Alibaba business units in these areas."
Much like Amazon, Alibaba span out the computing arm it used to support its own infrastructure. Aside from its e-commerce dominance in China, the firm has been a leading player in the mobile payment market since launching Alipay in 2004; owns China's streaming service Youku Tudou; and holds a sizable stake in Chinese social media firm Sino Weibo.
It is even the majority owner of a film studio acquired in 2014, now known as Alibaba Pictures, which is listed on two Asian stock exchanges and worth around $4bn.
So the Alibaba Cloud approach is to offer the cloud services its parent uses across its own five units.
Whereas Alibaba is looking to work more and more with the channel, he said, and is in the final stage of development that sees its platforms tailored into bespoke solutions for specific customers.
He claimed that the public cloud market is now moving away from its first phase of just getting into the cloud and reducing expenditure, and into a phase of improving how businesses perform.
"There are three levels. The bottom is infrastructure, the middle is the vertical platform layer, and on top is an application," Wang said.
"With the applications, we provide some, but more and more we rely on the partner ecosystem.
"They provide different vertical services, for example in retail we provide infrastructure and the middle layer, and on top some other people will provide pricing and stock management.
"The first generation is about migrating to the cloud, or deciding whether to go or not. But today is the next stage."
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Alibaba Cloud's EMEA boss on the five UK verticals it's gunning for
Cloud provider's EMEA GM Yeming Wang tells CRN how the Chinese vendor is shaping up in the West
With this in mind, Alibaba Cloud is looking to recruit partners with specialities and development skills in its chosen verticals.
The vendor already has strong relationships with some of the largest telcos and SIs in the world, but that doesn't mean it is not also looking to work with smaller partners.
"Some clients are more on the vertical side, especially those that want to explore transformation," Wang said.
"The other kind is more in the infrastructure level; they want to have general public cloud as a multi-cloud alternative.
"For the first kind of business we need more vertical knowhow, and the second is about ease and cost effectiveness. On the second one we are getting more VARs and VADs on board."
Wang said that the vendor has signed up a pan-European distributor with a remit to bolster its partner ranks and recruit more VARs, managed services providers, and ISVs more quickly.
"Some other cloud providers have rigid criteria to say how much volume of revenue and how many certified engineers you have to have in order to be treated as a serious partner"
Despite initially prioritising its relationship with SIs in Europe, he stressed that these smaller partners more than make up for their lack of size with their development capabilities and reach into smaller niches.
"We have a pan-European distributor; the contract is signed but it is too early to say [who it is]," he said.
"It will create general coverage to provide services, and they will deal with resellers and VARs.
"This is their purpose and they very much believe that hardware will go to the cloud, so this is the right thing to do."
Partner concerns
When CRN has spoken to partners about Alibaba Cloud over recent months, a frequently raised concern centred on the support that the firm would be in a position to provide.
After all, the overwhelming majority of firms will have had no contact with the company whatsoever in the past and Alibaba has had next to no public visibility in the UK before.
The launch of the two London datacentres may have gone some way to addressing these fears, giving Alibaba a tangible local presence.
However, Wang said that Alibaba Cloud's expansion in Europe has progressed further than some might think. He said the cloud provider now has all the processes in place that partners would expect it to have.
"The on-boarding process is there," he explained. "We can sign contracts and provide training, rebates, and we periodically arrange training.
"We have held training many times in Spain, France, Germany and the UK for partners, and we give them certifications. This is basic, and something that you have to have.
"We're now in the second stage, regarding the joint go-to-market. We have found that we are managing the pipelines jointly with partners."
Wang touted Alibaba Cloud's offering by highlighting both differences and similarities between itself and AWS' technology.
He claimed that Alibaba's interface is very similar to AWS', meaning it doesn't take long for techies to pick up. Many of Alibaba's solutions architects "come from an AWS" background and can learn Alibaba Cloud "in half a day", he added.
But he also claimed that Alibaba differs in the way it treats partners. He said that smaller companies of other cloud providers suffer because they cannot hit the targets required to be treated as an important partner.
Instead, he explained, Alibaba assigns resources to partners based on the size of the end user, meaning that if a partner has a large customer they will receive the same treatment as a larger partner would.
"From the beginning we don't have lots of thresholds," he said.
"Some other cloud providers have rigid criteria to say how much volume of revenue and how many certified engineers you have to have in order to be treated as a serious partner.
"We are more customer driven. We try to be agile - at this moment at least - and we want to go to market together. We don't really care [how big they are]. We are business scenario-oriented and we will just go with them."