From 19–22 September, 2018, Alibaba Cloud hosted its ninth Computing Conference in Hangzhou, China. This is the largest cloud computing and artificial intelligence (AI) conference in China, attracting over 40,000 visitors and featuring over 500 topics. Alibaba’s USD 430 billion market capitalization, 10 times its annual sales, reflects the enormous breadth of Alibaba’s ambitions.
In just a few years, Alibaba has become one of the world’s most fascinating and cutting-edge technology businesses — and is key to understanding where the digital era is heading. Here are our main impressions, which cover just a few of the themes discussed.
- Alibaba Cloud has made significant progress in boosting its offering. A complete cloud strategy should support both the public cloud to drive agility at scale and streamline business development and operations as well as the private cloud to optimize existing IT systems and processes for sustainable innovation. Alibaba already holds a leading position in the public cloud market, and through its strategic investment in Apsara Stack, it has boosted its stake in the private cloud space. Apsara Stack’s latest release ensures a unified architecture with its public cloud platform. It also supports scalability across 10,000-plus nodes — Microsoft Azure Stack only supports a maximum of 12 nodes. Alibaba Cloud also announced its partnership with VMware, which will improve its coverage of hybrid cloud scenarios.
- New Retail is moving up the retail value chain. Alibaba showcased its New Retail vision on Singles’ Day last year. Since then, Alibaba has been aggressively investing in the retail space. At the conference, Alibaba announced further achievements of its New Retail initiatives. For instance, at its Hema supermarket chain, sales per square meter reached RMB 56,000 — nearly four times that of conventional supermarket chains. At its Intime department store, New Retail solutions boosted sales by 18 percent — the highest growth rate in the past 10 years. Significantly, Alibaba’s New Retail use cases are evolving to include supply chain solutions: LST, its digital supply chain offering for small retailers, now reaches over 1 million mom-and-pop stores. And Alibaba is using AI to enhance its logistics solutions: For instance, Cainiao Network has launched new solutions like a smart voice assistant to increase delivery efficiency.
- New Manufacturing has a customer-centric core. Alibaba believes that mass customization is at the core of new manufacturing, with information and products flowing directly between the consumer and the manufacturer. All these information exchanges and transactions will run on its commerce platform. For instance, Siemens’ IoT operating system MindSphere runs on Alibaba Cloud. The platform allows users to build an open ecosystem of innovation. Alibaba’s manufacturing offering covers logistics and analytics services to extract insights from data generated during the manufacturing process; it also makes use of “dormant data” via Alibaba’s central AI offering, ET Brain. Alibaba is working closely with many traditional manufacturing firms to help them embrace the opportunities that digital technologies bring. Alibaba’s platform approach connects customers to manufacturers and to sales and marketing players. This shortens the overall manufacturing value chain significantly and rings in dramatic changes for manufacturers.
- Ant Financial sits at the heart of Alibaba’s financial services offerings. The theme of the conference was “Technology for Good, Finlife for All,” reflecting Ant Financial’s strategy for serving unbanked individuals and SMEs in China. Alibaba is pushing this concept across different industries beyond financial services, including the public, healthcare, and manufacturing sectors. Ant Financial uses a three-tier platform approach that brings together technology, business, and trading relationships. Ant Financial announced Ant Financial Technology as a new platform that aims to empower hundreds of financial institutions.
- The synergy between edge, cloud, network, and devices is central to Alibaba’s telco pitch. Alibaba sees cloud computing as important for both reducing the cost of running telco networks and transforming the telco business model from product to service provider. Alibaba’s global portfolio for telcos stretches from a campaign management platform for customer engagement analytics to a big data platform, a security offering, an IoT platform, an MVNO solution, and an intelligent service center. It has developed chatbots for Vodafone and Etisalat; a customer engagement platform for U Mobile; and new retail stores, an omnichannel experience, and customized digital services for China Unicom. Alibaba also provides a range of SDN offerings for telcos. Alibaba’s broad partner ecosystem and expertise in many other sectors such as finance, manufacturing, energy, minerals, logistics, and retail make it an interesting vendor for telcos.
- Alibaba’s hybrid blockchain product strategy facilitates innovative use cases. Alibaba leverages open source Hyperledger Fabric to provide blockchain services over its public cloud platform. Ant Financial has invented its own blockchain technology from scratch as an on-premises offering, targeting those enterprise needs that open source frameworks can’t support directly: Its blockchain product uses DAG and asynchronous BFT consensus mechanisms, which can improve transaction performance with scale and cover over 100 nodes. Alibaba’s blockchain offering provides out-of-the-box consortium management features and cross-chain services; these help organizations establish and navigate ecosystem relationships more easily. This hybrid approach allows organizations to explore blockchain technology for their own technical environments and business needs more easily.
- Alibaba’s IoT investments significantly improve its IoT competency. Alibaba Cloud provides foundational IoT services on its public cloud platform for IoT data aggregation, processing, analysis, and actuation. It also offers AliOS Things as an embedded IoT device operating system to address data integration requirements. Investment has boosted two additional areas: 1) Alibaba has established an IoT connectivity alliance with over 350 members; and 2) Alibaba is proactively working with domestic standards organizations and global alliances, such as the Alliance of Industrial Internet and the LoRa Alliance. In this context, Alibaba demonstrated its “sky IoT” solution at the conference — an airship carrying a LoRa base station floated in the sky over the conference building.
- Alibaba is boosting its portfolio with proprietary chip and quantum technology. Alibaba already has access to lots of data to feed its advanced AI algorithms; it is now pushing deeper into computing by launching the Pingtouge Semiconductor Company. This focuses on specialized AI chips such as Ali-NPU. And Alibaba’s DAMO Academy is collaborating with the Chinese Academy of Sciences on quantum computing research. Together, they have developed Tai Zhang, the world’s most powerful quantum circuit simulator. Alibaba offers its quantum computing service on Alibaba Cloud, where customers can test quantum apps.
- Alibaba Cloud is just getting going internationally, but momentum is building. Alibaba Cloud is not yet a household name in most countries outside China. The brand has made significant inroads in countries such as Japan, Malaysia, and Singapore, not least because of its payment scheme Alipay. Alibaba is aware of the need to push its international expansion and connect it to the “One Belt, One Road” initiative. Its international cloud strategy is based on two pillars: 1) Go abroad, which helps Chinese firms do business in countries including Japan, Indonesia, Malaysia, Singapore, India, Australia, the UAE, Germany, and the US; and 2) Go Asia, which helps foreign organizations do business in China via its cloud infrastructure, compliance, and industry solutions. Alibaba’s international cloud portfolio comprises roughly 80 of the 180 products it offers in total. Alibaba also has key partnerships with Bosch, IKEA, LVMH, Santander, SAP, Siemens, Vodafone, and Volvo.
These reflect only a small number of Alibaba’s overall activities but show that Alibaba will be instrumental in setting the tone and course of technology developments in the years ahead.
Forrester’s Principal Analysts Dan Bieler, Charlie Dai, Danny Mu, Senior Analyst Xiaofeng Wang, and Analyst Meng Liu contributed to this blog. It can also be found here.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends.