Alibaba’s dominant cloud business could take on Amazon
August 12, 2016
Grazed from YahooFinance. Author: JP Mangalindan.
Chinese e-commerce giant Alibaba (BABA) reported stellar fiscal first-quarter earnings on Thursday propelled by revenues that spiked 59%, surging past Wall Street estimates. And while talk of e-commerce transactions soaring on mobile dominated the announcement, analysts also paid close attention to the company’s cloud computing business, Alibaba Cloud — and for good reason.
Founded in 2009, Alibaba Cloud has evolved into China’s dominant cloud computing services provider, offering clients including Dutch electronics giant Philips, Schneider Electric and marketing platform Blogmint a wide range of storage, security, and database management options. For its fiscal first quarter, the company reported Alibaba Cloud revenues swelled 156% year-over-year to $188 million with 577,000 paid users…
Analysts who follow the company closely expect Alibaba Cloud to become a key growth driver in the medium- to long-term. “AliCloud is massively underestimated in our view,” wrote Oppenheimer internet analyst Jason Helfstein in a July report. China’s cloud industry is on the brink of massive growth, with Alibaba Cloud best positioned to reap the benefits, he added. In fact, Helfstein expects Alibaba Cloud’s revenues will grow 112% annually — more than the Street’s estimates of 82% — growing from just 3% of Alibaba’s overall annual revenues currently to 18% by 2020…
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