JD and US firm Cloudflare join forces to challenge Alibaba in China’s vast cloud market
The upcoming icloud computing services market in China is dominated by the cloud business units of Alibaba and Tencent Holdings. That’s why JD and US based hitech firm Cloudflare decided to join forces to challenge, in particular, Alibaba in China’s vast cloud market.
“With the global pandemic increasing the strain on internet traffic, cloud services providers are increasing their capacity to support the demand,” said Wong Yih-khai, a senior analyst at technology research firm Canalys. “This is crucial for JD Cloud & AI given that its customers are typically retail and commerce-based.”
Why cloud’s market is so important? According to data, companies spending on cloud infrastructure services in PRC reached US$10.7 billion last year, up 63.7% from 2018, according to data from Canalys. Alibaba Cloud accounted for a 46.1% share, while Tencent Holdings’ cloud business unit had a 17. 3% share. JD Cloud & AI—one of JD.com’s four core businesses, which include JD Retail, JD Logistics and JD Digits—will now offer “a unique proposition to potential customers” in terms of content-delivery-network services, according to Canalys’ Wong.
With global internet traffic up 30% because of the pandemic outbreak, existing logistical and technical hurdles in China are increasing the burden for global businesses.
Long-standing competition between e-commerce giants Alibaba and JD.com is set to intensify across the fast-growing cloud computing services market in China. Through its partnership with JD Cloud & AI, Cloudflare will establish 150 new data centers in mainland China, up from 17 such facilities at present, to help global enterprises do business in China and domestic companies expand overseas, according to a joint statement from the two firms at the end of April.
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