Alibaba: “Our Ultimate Strategy Is to Build the Future Infrastructure for Global Commerce”

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Amazon is not the only big online retailer slowly turning into an infrastructure provider for commerce.

Alibaba has an ever getting stronger cloud business, like Amazon, and Alibaba, like Amazon, has plans beyond being a mere marketplace.

Business of Fashion recently published an overview over where Alibaba’s cloud stands now:

Alibaba has only recently begun to make inroads beyond China and into a global cloud market dominated by Amazon and Microsoft Corp. It is the biggest provider of internet-based computing — everything from storage and data analysis to server hosting — for government agencies and corporations within its home market, but abroad it is more narrowly focused on supporting Chinese-based organisations on foreign soil. The division now accounts for less than 5 percent of Alibaba’s revenue, the lion’s share of which comes from an e-commerce division still growing at double-digit rates. […]

Like Amazon’s, Alibaba’s cloud service emerged from the enormous computational power needed to handle millions of online shopping transactions. But unlike its US counterpart, it enjoys home-field advantage in a vast Chinese market where web-based computing is still novel to many enterprises.

Alibaba said this summer that the cloud unit has more than 570,000 paying customers and was close to breaking even. Alibaba launched a second data center, and the first one outside China, in Silicon Valley last year in October. Alibaba plans to open data centers in Europe, the Middle East and in Asia outside of China.

​Alibaba’s cloud can learn a lot from Alibaba’s immense scale, and especially from the company’s singles day activities. Which is to say, Alibaba’s cloud has to handle unprecedented bursts of activity on the system.

Technology Review has an interesting report on Alibaba’s cloud efforts (which reads at times like an ad though):

“AI technologies have been the key to optimizing the efficiency of our e-commerce platforms,” [Gu Xuemei, Alibaba’s vice president and head of the company’s Search Business Unit.] says.

Alibaba uses various kinds of machine-learning technologies to realize AI, including high-dimensional statistics, online learning, transfer learning, and deep learning. These technologies enable Alibaba to scale its e-commerce platforms to meet customer demand and produce innovative features in its image, video, and speech-recognition technologies.

Machine learning gets better the more data the system can process (and thus learn from). Like Google, Alibaba has a sort of home advantage here:

The strength of Alibaba’s machine-learning models comes from its effective use of billions of data samples and attributes, according to Zhou Jingren, Alibaba’s vice president and chief scientist of Alibaba Cloud. He adds that Alibaba’s server architecture has been developed to handle such large models and their billions of model parameters.

“Through data and model parallelization, we distribute the billions of model parameters into a large set of servers for parallel computing with failover mechanisms”—that is, switching to a standby server, system, or network when failure occurs, Zhou says. “Our most effective machine-learning algorithms have been implemented, and their application produces many benefits.” The sheer scale of data attributes, from 10 million to 1 billion, makes computational advertising work much better, he says.

Most intriguing, though, are the strategic ambitions by Alibaba:

But while Alibaba will continue establishing a preeminent global shopping presence, the company is striving to go beyond online sales. “E-commerce is just the first phase of Alibaba’s entire strategy,” says Zhang, the company’s CTO, adding that half of Alibaba’s employees already work in areas such as big data, cloud computing, AI, mobile Internet, smart logistics, and digital entertainment.

“Our ultimate strategy is to build the future infrastructure for global commerce,” he says. That’s an undertaking that, while highly ambitious, remains true to Alibaba’s core mission of making it easier for consumers and companies alike to do business anywhere.

For Alibaba, this means two separate things:

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