Alibaba Retools Cloud Unit with Business Chat App



DingTalk bundled into cloud unit

The internal restructuring that Alibaba (BABA) unveiled this month also affected its cloud computing business, one of its closely watched operations. As part of the reorganization, Alibaba is merging its enterprise chat service DingTalk into the cloud unit. Through DingTalk, Alibaba provides companies with collaboration and communications software tools, such as video-conferencing software. The bundling of DingTalk into the Alibaba cloud unit comes only a few months after its competitor Zoom Video Communications (ZM) went public and expanded its war chest. Zoom went public in April and raised more than $750 million in cash in the process.

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The decision to bring DingTalk under the cloud business looks designed to help make Alibaba cloud services more attractive for enterprise customers with the promise that they can get a variety of tools and services they need for their digital transformation in one place. Additionally, the bundling could also help the cloud unit in its pursuit of more customers. The DingTalk platform serves over 7.0 million businesses and organizations around the world, according to a report from Alibaba news agency Alizila. Perhaps the DingTalk integration could make it easier for the cloud unit to access new potential customers by pitching to DingTalk clients.

Alibaba’s cloud revenue soared 76%

Cloud has been Alibaba’s fastest-growing business, growing 76% YoY to generate $1.1 billion revenue in the March quarter. Microsoft (MSFT) and Amazon (AMZN) recorded cloud revenue growth of 73% and 41% YoY, respectively, in the March quarter. Cloud revenue fell around 2.0% YoY at IBM (IBM) in the first quarter.


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