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Alibaba Opens Second Cloud Zone in India

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Alibaba doubles cloud zones

Alibaba (BABA) has recently opened a second data center location in India. It opened its first cloud zone there in January. It defines a cloud zone as a physical area that hosts one or more data centers and is supplied by an independent power grid.

There’s a good reason behind doubling its cloud zones in less than a year. Spending on public cloud services in India is on track to hit $2.5 billion in 2018, growing 37.5% from 2017, according to Gartner estimates. By 2019, India’s public cloud market could generate $3.2 billion in annual revenues.

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Expecting 100,000 paying cloud customers

Alibaba is expanding in India because it has seen strong demand for its cloud services there. It hopes to gain ~100,000 paying cloud customers in India by the end of the first quarter of 2019.

Alibaba battling heavyweights in India

Alibaba is competing with Amazon (AMZN), Microsoft (MSFT), and Alphabet’s (GOOGL) Google for revenue in India’s cloud market. Amazon is spending more than $5 billion to grow its operations there, including its cloud business. Microsoft’s investment in Flipkart, the Indian e-commerce operator in which Walmart (WMT) took a majority stake a few months ago, is seen as part of its push to make inroads into India’s cloud market. Walmart is also a Microsoft cloud customer.

Google opened its first data center in India in November 2017. Its India cloud revenue tripled in just seven months.

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