Headquartered in Hangzhou, China, Alibaba cloud holds 9.5% of the global cloud market share. It is in third place, right behind Amazon and Microsoft, with $8.7 billion in revenue in 2021, according to a recent press release from Gartner. While its primary customer base resides in China and Asia, Alibaba cloud is also available in the US. But, its adoption in the US is relatively low. However, Alibaba Cloud has a good potential for expanding its market share in the US, especially among SMBs. This article will analyze this potential and suggest a marketing strategy to help Alibaba cloud reach its target SMB customers.
Alibaba Cloud has a service offering comparable with AWS, Azure, or GCP. However, the implementation of particular services in Alibaba deviates from that of their competitor offerings. Here we describe the key services in Alibaba cloud and their similarities and differences with the other cloud providers.
Virtual machines
The basic compute service in Alibaba Cloud is named Elastic Compute Service (ECS), probably following the naming style of AWS EC2. Alibaba offers virtual machines in both X86 and ARM architecture, and multiple ECS instances are available such as general purpose, compute-optimized, memory-optimized, etc. In addition to the virtual machines, Alibaba also offers GPU and bare-metal computer services. We can see that there are not many technical differences in the virtual machine service of Alibaba compared to the other leading cloud providers.
Virtual Private Cloud
The Virtual Private Cloud is the next most important service after the compute service in a public cloud. The Virtual Private Cloud allows a business organization to build a secure private virtual data center in the cloud.
Alibaba Virtual Private Cloud (VPC) has similar features to AWS VPC or Azure Virtual Network, which are the Virtual Private Cloud services offered by those two cloud service providers.
Alibaba also offers a VPN Gateway, a NAT Gateway, and a Load Balancer service that can be integrated into the VPC. If a business organization has multiple Alibaba VPCs in different regions, the VPCs can be interconnected using the Alibaba Global Network Solution. Altogether, these networking services match the similar services offered by Alibaba’s competitors.
Complementing its VPC offering, Alibaba also offers a Smart Access Gateway, a hardware box for connecting on-premise enterprise workloads to the Alibaba VPC via a secure VPN tunnel over the public Internet. Installing this hardware device at the edge of their enterprise private network, a company can quickly build a robust hybrid cloud where their workloads in public and private clouds are securely connected. This is an appealing solution to SMBs who wish to preserve their investments in private data centers that are already built.
Kubernetes
More and more enterprises are adopting container-based, microservices architecture for their software to improve business agility. However, operating self-managed Kubernetes is too much of a burden either on-premise or in the public cloud, especially for SMBs with limited IT expert resources.
Alibaba has several managed container-related services that help SMBs quickly run containerized applications. Alibaba Cloud Container Service for Kubernetes (ACK) is the primary Kubernetes service from Alibaba. Users can quickly deploy multiple Kubernetes clusters on the Alibaba Cloud using ACK. It offers a flexible selection of worker nodes, including virtual machines, bare-metal servers, and GPU-accelerated instances. Also, it has a serverless option to run containers, which relieves the users from managing the worker nodes.
Databases
Different enterprises have adopted different database software for their existing applications. When adopting a hybrid cloud architecture, the unavailability of their preferred database software with a particular cloud service provider could be a show-stopper. Therefore, cloud providers strive to expand their database offerings to include a range of database solutions.
ApsaraDB is the main managed database service from Alibaba. It supports all the major relational database engines like MySQL, MariaDB, and PostgreSQL so that applications designed for these databases can be moved to Alibaba without reworking the software source code. AbsaraDB also supports popular NoSQL databases such as MongoDB and Hbase. Alibaba Cloud also offers PolarDB, which is a cloud-native relational database solution. Will all such managed database offerings, Alibaba cloud, pose no barriers to SMBs who wish to host their workloads on Alibaba.
Regional availability
Most of the Alibaba data centers are located in mainland China and Asia. North America has two data centers in Virginia and Silicon Valley, and two other data centers are located in the European region in London and Frankfurt. While Alibaba cloud has less number of data centers in the US and Europe, they cover the key cities in both regions.
According to the Census Bureau, 99.9% of all businesses in the US fall under the category of SMB. With the recent impact on business due to the COVID-19 pandemic, most SMBs are engaged in a fast digital transformation route. Therefore, SMBs have become a vital target customer base for most cloud service providers.
SMBs in the US is involved in many industries such as professional services, construction, real estate, retail, health care, etc. A typical SMB employs fewer than 1000 people and has a structured IT department. While SMBs have tight budget limits on IT infrastructure, cloud spending of SMBs has increased by 38% in 2022 compared to 2021, according to State of the Cloud Report – 2022 from Flexera.
The same report also shows that AWS is the preferred cloud service provider for SMBs, with Azure and GCP being the following choices. However, the adoption of Alibaba cloud by SMBs has increased to 17% in 2022 from just 7% in 2021.
While most SMBs in the US use AWS or Azure as their primary cloud service provider, Alibaba cloud can satisfy their business and technical requirements. However, most SMBs are unaware or unfamiliar with Alibaba cloud and its service offerings.
Therefore, a good content marketing campaign could help Alibaba expand its US cloud business. This content must target the IT professionals employed in SMBs and the non-tech managers or SMB owners responsible for decision-making. The content could be distributed via popular channels such as social media, blogs, and email newsletters. Here we describe some topics that would be interesting for the SMBs and can be used in such a marketing campaign for Alibaba.
Digital transformation
Digital transformation is a vast topic and a very appealing subject to SMBs, given that most are in the middle of their digital transformation journey. The objectives and methodologies of digital transformation vary by industry. So, to get the attention of the SMBs, the content must also be segregated by industry.
Cloud cost optimization
Resources in the public cloud are available instantly. The public cloud also enables automation, so an organization can allow its employees to have a lot of autonomy for cloud resource management. Therefore, after adopting the public cloud, many organizations struggle to keep their cloud expenses under control as users provision and use cloud resources on their own.
Cloud cost control requires a lot of planning and monitoring and many aspects of cost control. Therefore, content on this topic could be very engaging for IT professionals in SMBs.
Cloud service offerings
Public cloud providers tend to offer a rich array of cloud services such as database as a service, logging, and monitoring as a service, serverless functions, etc. However, many organizations tend to stick to traditional application architecture and not use such services even after adopting the public cloud.
While this may not affect their business objectives, using the pre-built service can reduce the application development time and ease the operational workload. It helps an organization gain the full benefit of the public cloud. Therefore, educational content on these services would be helpful to SMBs.
Best practices of cloud architecture
Architecting a virtual private data center in the public cloud requires a lot of planning and consideration. There are industry-established best practices that can help this planning process, and content on this topic can help the IT personnel in SMBs to make the correct design decisions.
Hybrid cloud
Some SMBs host their workloads in an on-premise private cloud, and they would be interested in using public cloud while securing their investments in the existing on-premise cloud. Therefore, content in hybrid cloud will be appealing to such SMBs.
Cloud Security
Security is often an overlooked matter in the cloud architecture of many SMBs. Since cloud security experts are expensive, SMBs cannot afford to get their service, especially in the early stages of cloud adaptation. Content on cloud security can help these SMBs to address the security problems and avoid catastrophic failures in the long run.
DevOps practices
Most SMBs find adapting DevOps practices challenging; however, DevOps practices are key to achieving full agility in the cloud. So, content intended to educate DevOps teams will particularly interest SMBs.
Cloud-native architecture
Cloud-native architecture can help SMBs in SAAS businesses compete with their larger counterparts by being agile and quickly rolling out new features. It can also help a particle SMB to gain an edge over its competitors.
Cloud-native architecture is a topic that can cover a wide range of technical subjects such as containers, Kubernetes, microservices, etc. Content on these topics can get repeated visits from IT department employees in SMBs.
Apart from content marketing, presence in the start-up and incubation hubs around the country generates early adoption of its current cloud stack. Or leading University hackathons and sponsoring campus projects to create awareness and technical capability. Alibaba Cloud has a good potential for expanding its businesses in the US since it has a range of technically competitive service offerings. For expanding its business, SMBs will be a crucial target market segment for Alibaba because the SMBs are cost conscious. They have a promising potential for digital transformation in the coming years.
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