At least 11 international technology firms have partnered with Alibaba to enable them to use the Chinese e-commerce giant's cloud computing arm, Alibaba Cloud, and bring their software products to the Chinese market.
According to a CNBC report, the 11 tech firms come from the United States, Japan, Europe and Thailand. Among the firms included are SAP and HERE, the mapping system managed by a conglomerate of German car manufacturers like Daimler.
"Selling into China is not easy. First, you would need infrastructure help from someone like Alibaba Cloud where we have the best data centers and network. Secondly, you would have to work with local regulation issues because unlike other countries, China requires cloud operators to hold certain licenses around data regulation," Sicheng Yu, general manager of Alibaba Cloud Global, told CNBC in a phone interview. "That is where we can help. We help them comply with local regulation."
Alibaba has collaborated with many partners who have their own software products that are on the cloud, but getting the products into China is different and more challenging. With Alibaba's cloud, the software products can run using the company's infrastructure that includes data centers and the large user database.
Sicheng Yu said that customers interested in cloud services may have access to Alibaba's products as well as the services from its partners without jeopardizing Alibaba Cloud's own business.
"We hold a very open attitude towards all external players in cloud space. We just want Alibaba cloud to be the one-stop shopping place which provides the most comprehensive options to customers," the executive said.
Aside from giving foreign firms access to the Chinese market, it would also enable Alibaba to expand its offering with other products that it does not have, at the same time hosting it on its cloud.
Alibaba wants to diversify its sources of revenues by expanding beyond its core e-commerce products. The company's revenues increased 175 percent year-on-year in the three months ending March 31, which could be attributed to its cloud unit, the company's fastest-growing business segment. But for Alibaba, it accounts for only 4 percent of total revenues.
Alibaba Cloud has over 2.3 million customers, more than 500,000 of them are paying customers.