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Alibaba: Still the World’s Fastest-Growing Cloud Vendor

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Oct. 3 2018, Updated 7:32 a.m. ET

Alibaba has 5% of global cloud market

Alibaba’s (BABA) cloud business doesn’t generate the billions of dollars in revenue that Amazon (AMZN) and Microsoft (MSFT) do in their cloud computing divisions. As such, Alibaba trails these competitors in terms of global cloud market share.

Synergy Research data show that Alibaba held 5% of the global cloud market at the end of June. Amazon and Microsoft had 34% and 14% market shares, respectively, in that period. IBM (IBM) and Alphabet’s (GOOGL) Google held 8% and 6%, respectively, of the global cloud market.

Although Alibaba’s global cloud market isn’t comparable to Amazon’s and Microsoft’s, it comes out on top for cloud revenue growth rate.

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Cloud revenue increased 93%

If we can go by the growth rates of the world’s top five cloud vendors in the June quarter, then Alibaba is still the world’s fastest-growing top cloud company. Its cloud revenue rose 93% YoY (year-over-year) to $710 million that quarter. Cloud revenues for Amazon and Microsoft grew 49% and 89% YoY, respectively, in that period, and IBM’s cloud revenue increased 20% YoY. Google doesn’t disclose much about its cloud business, but its segment that houses its cloud business posted a 37.5% YoY increase in revenue in the quarter.

Growth drivers

The growth in Alibaba’s cloud business in the June quarter was supported by existing customers increasing their use of its cloud services and by an increase in paying cloud customers.

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