Alibaba is aiming Aliyun at Chinese companies who are looking to make inroads into the U.S. market. Conversely, companies in the U.S. that are looking to expand into China may find Aliyun an attractive option as well, says Liu, the Forrester analyst. "No doubt Aliyun will face intense competition in the global market, but a China-centric customer base (going global) will probably grow to be a nice niche with which it can dominate over time as China's enormous economy continues to expand," Liu wrote in an email.
Aliyun still has some work to do to build up its offering in America though. In China Aliyun has almost two-dozen features, but its offering in Silicon Valley is relatively bare bones with elastic compute, storage, load balancing and a relational database. More advanced features like Aliyun's unique cluster compute engine are not yet available outside China.
Alibaba isn't just opening data centers in the U.S., it's partnering with domestic vendors as well. Equinix is a collocation hosting provider, meaning it provides data center space for organizations that then fully manage the technical hardware inside of it. The big advantage to using Equinix is that it has direct connections between its collocation facilities and most major IaaS cloud providers, including AWS, Azure and now Aliyun too, thanks to a new partnership announced last week.
Alibaba is looking to make other partnerships as well: This week the company announced the Marketplace Alliance Program with Intel, which will allow partners to construct infrastructure offerings that are compatible with Aliyun.
And the international expansion plans go far beyond just the shores of the U.S.: Liu says next on Aliyun's list are to open sites in Germany, Singapore and Japan.
Two can play this game
Amazon isn't sitting idly by. AWS has more than 1 million customers in 190 countries and data center regions in North and South America, Europe and Asia/Pacific. In 2013 it announced plans to expand into Beijing. The service began in early 2014 but today it remains in a limited preview. AWS says a "select group" of Chinese-based organizations and multi-national companies with customers in China have been invited to use the service.
AWS says in order to comply with Chinese laws and regulations it uses a "multi-partner" approach to offering cloud services in China. Providers such as ChinaNetCenter and SINNET provide infrastructure, bandwidth and networking capabilities that run the AWS software. Because of complications in operating a Chinese data center the Beijing region has a limited product offering compared to AWS's other regions around the world. It requires users to set up separate credentials compared to all of AWS's other regions too. AWS declined to comment on Alibaba's expansion into the U.S. cloud market.
Sign up for CIO Asia eNewsletters.