China Data Center Opened By Alibaba Group

Alibaba Group Holding Ltd. announced in August that they will be opening a fifth China data center to expand operations of their AliCloud service.

The new Shenzhen data center will serve “large and small companies, financial institutions and other third parties” in Southern China, and points to Alibaba’s investment growth in the small but expanding cloud computing industry. AliCloud offers Chinese companies access to computing power and storage services to run their online businesses.

In an effort to continue increasing their cloud offerings, Alibaba recently opened a Hong Kong data center and operates three other facilities in mainland China. The AliCloud service was first started in 2009 and has expanded quickly, posting revenues of $38 million last quarter and boasting more than 1.4 million clients. While only comprising a small part of the company’s overall revenues for the quarter, the gains still signify the growing power of the AliCloud service.

AliCloud is similar to the services offered by Alibaba’s rival Amazon and was originally created as part of the company’s technical infrastructure that was stored in-house. The service has since been moved to multiple colocation data centers and now leases processing and storage space to small and medium-sized Chinese businesses including gaming companies.

Alibaba is preparing to launch an initial public offering in the U.S., which many expect to happen by the end of September. In the company’s latest filing with the Securities and Exchange Commission, Alibaba noted that a major focus of their current business strategy is to improve the data and cloud computing technologies they provide, expand e-commerce offerings and attract more mobile users. As the company widens its reach into a variety of markets, their data center footprint is sure to grow larger as well.