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Alibaba Cloud Revenues Double – Softbank Backs $3 Billion Investment

Company's reach grows in Chinese market, secures major Softbank investment

By CBR Staff Writer

Alibaba, which has been making a concerted push into the European market, saw global cloud revenues nearly double year-on-year in the quarter ended June 30, the company said in an earnings announcement on Thursday.

Revenue from cloud computing increased 93 percent over the same quarter in 2017, to RMB4,698 million ($710 million). The company as a whole saw revenues jump 61 percent, with net profit for the quarter of 8.7 billion RMB ($1.3 billion).

Alibaba Cloud“In the June 2018 quarter… we have launched products that enable customers to achieve fast, cost effective and secure data migration from on premise data centers onto the public cloud. For example, enterprises can leverage Lightning Cube, our cloud migration solution that enables uninterrupted migration of petabytes-scale data”, the company said.

Maggie Wu, Chief Financial Officer of Alibaba Group said: “The exceptional growth across our major segments of core commerce, cloud computing and digital media and entertainment validates our strategy of investing in customer experience, product, technology and infrastructure for the future. We remain confident in our ability to continue to gain market leadership by delivering unique value propositions to our business customers, partners and consumers.

Alibaba Cloud opened a UK office in April 2016 and in November 2016 cut the ribbon on its first European data centre, in Frankfurt, which it shares with Vodafone. It did not break out European results, naming recent Chinese client wins instead.

Alibaba Results: $3 Billion Investment in Delivery Services

In a note published alongside its earnings report today, Alibaba – which recently merged its Koubei local services business with on-demand delivery service company Ele.me, which it recently acquired – said that Japan’s Softbank and Alibaba were together investing $3 billion into the company’s new delivery business.

Alibaba Cloud

Alibaba’s Yeming Cloud

Alibaba and Softbank have a deepening relationship, despite China and Japan’s lingering geopolitical tensions.

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Earlier this year, Softbank used its stake in Alibaba Group Holding Ltd. as collateral for an $8 billion loan from a group of Western banks in what is one of the biggest deals of its kind, according to Bloomberg. Morgan Stanley, Citigroup, Goldman Sachs and seven others made the so-called margin loan, which was guaranteed only by Softbank’s Alibaba holding.

Alibaba’s active consumers on its Chinese retail marketplace topped a stunning 576 million for the quarter, the company reported.

Access to that Chinese marketplace is a core USP of the company’s European push, with EMEA General Manager Yeming Wang earlier telling Computer Business Review that it was the only cloud services provider that could provide seamless access to the Chinese market.

(AWS runs two availability zones in the China region; both run by Chinese companies, as Beijing does not allow foreign companies to run cloud computing infrastructure in the country. Microsoft runs its Chinese Azure regions through 21Vianet. Google has no Chinese cloud infrastructure at present).

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