Alibaba Cloud opened two data centres in London

The e-commerce giant Alibaba is challenging Amazon and Microsoft in cloud service by adding London to its global data centre map.

If anything can indicate that the world is still confident in the UK as a business hub, amidst all the confusions over deal or no deal of Brexit, new investment from Alibaba can certainly do. The cloud service division of the e-commerce giant, Alibaba Cloud, announced on Monday that it is opening two data centres in London.

“Our decision on the location is driven by the rapidly growing customer demand in the U.K. The United Kingdom is one of the fastest growing European markets for Alibaba Cloud,” said an Alibaba spokesperson. “We are also working with many global and local partners to make sure we are offering best-in-class technologies, services and consulting to customers.”

Among the services the data centres will provide include a so-called “elastic computing”, which is a dynamic system to manage traffic spikes in the network, as well as deliver application services and big data analytics. Alibaba Cloud’s UK clients come from sectors like retail, finance, media, education, research, and logistics, and include public companies like the software maker SDL and the B2B media and event company Ascential.

Cloud service has become a key battlefield for the webscale companies and are clearly delivering results for the market leaders. Over 60% of Amazon’s operating income was from AWS, its cloud service division, in the first half of 2018, while Azure has been the most stellar performer among all Microsoft products.

Meanwhile cloud services have also attracted unwelcome following. According to a report by PwC, “Red Apollo”, a hacking group based in China, launched a series of sustained cyber-attacks last year, specifically targeting cloud service providers. The logic goes that, if they could break the defence of a major cloud service, they would be able to spread spying tools and malware to all the companies on these outsourcing services.

London joins Frankfurt to form Alibaba Cloud’s network in Europe. By the time the new data centres are up and running the company will have 52 data centres sites in 19 regions for its cloud service.

Microsoft strives for an intelligent edge in IoT

Microsoft has announced it will invest $5 billion in the Internet of Things over the next four years focused on security, creating development tools and intelligent services for IoT and the edge.

With IoT set to offer profits for certain segments of the ecosystem, Microsoft is in a solid position, and who would have thought we would have been saying that a few years ago. Since Satya Nadella took over as CEO the company successfully transformed into a powerhouse of the cloud world, which offers a superb foundation to reap the benefits of the IoT euphoria.

“Today, we’re planning to dedicate even more resources to research and innovation in IoT and what is ultimately evolving to be the new intelligent edge,” said Julia White, CVP at Microsoft Azure.

“With our IoT platform spanning cloud, OS and devices, we are uniquely positioned to simplify the IoT journey so any customer – regardless of size, technical expertise, budget, industry or other factors – can create trusted, connected solutions that improve business and customer experiences, as well as the daily lives of people all over the world. The investment we’re announcing today will ensure we continue to meet all our customers’ needs both now and in the future.”

While IoT has been a buzzword for years, we are just about seeing the adoption and realisation of the business models which might live up to the promise. We are never short of forecasts or predictions about how successful this segment will be, but here is another one. AT Kearney predicts IoT will lead to a $1.9 trillion productivity increase and $177 billion in reduced costs by 2020. With these numbers you can see why companies around the world, especially the ones where product margins are being squeezed, are excited about this evolution.

The focus for Microsoft here is about improving intelligence on the edge, another buzzword which faded from popularity in recent times but is surging again now. Maybe discussions about the edge were just too early; 5G and IoT are perhaps the catalysts to make the edge a relevant discussion once again. 2018 might be another year of false dawns when it comes to the investment boom, but there can’t be many of them left; companies will start spending soon.

The more activity which can be managed on the edge of the network, the more attractive and feasible IoT becomes. Microsoft has proven very effective at pumping a craze before it peaks to reap the benefits of being first-to-market, but this only really since Nadella has taken over. Microsoft Azure is sitting very comfortably in the number two position in the IaaS space, and it would be far to assume IoT will consolidate the reformed technology-beast as a global super-power.