Alibaba to challenge Amazon & Microsoft in Europe

Chinese e-commerce giant Alibaba has strengthened its computing presence in Europe, launching new cloud products around artificial intelligence (AI) and big data that have already been in use in other markets.

One of the products allows users to take a photo of an item with Alibaba's AI, which can then bring up the product on its website. Another product is aimed at identifying security vulnerabilities in a network.

“We believe we need to service local clients leveraging our computers on the AI and big data,” Yeming Wang, general manager of Alibaba Cloud Europe, told CNBC. He said the company is planning to open new data centers in Europe, in addition to the one in Frankfurt.

Alibaba’s European cloud business “is still like a baby,” according to Yeming, who said he was excited about prospects in the market. “Today, we are talking a lot with local clients about digital transformation including retail, logistics, finance,” he said, adding: “Everyone is talking about digital transformation.”

The cloud business is Alibaba's fastest-growing unit. The company’s revenues grew 104 percent year-on-year in the fourth quarter of 2017 to 3.6 billion yuan ($570.6 million). It has more than one million paying customers, with cloud making up just 4 percent of total revenues.

Three years ago, Alibaba unveiled plans to invest $1 billion into a cloud computing unit to challenge its American rivals Amazon and Microsoft. It said the money would be used to expand the cloud unit’s international presence as it intends to set up data centers in the Middle East, Japan and Europe.

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