Chinese e-commerce company Alibaba Group marked a new revenue milestone, reaching 10 billion yuan in cloud revenue for its third quarter in 2019.
On February 13, the company issued the earnings report, indicating a massive increase in its cloud revenue. It hits a record-high revenue in a single quarter, which comes from the big demand in public and hybrid cloud services. By the end of the third quarter, the tech giant’s cloud business climbed 62 percent from the revenue in 2018.
Cloud services account for only 7 percent of the overall revenue of Alibaba Group. However, the unit is still as important as other areas, including wholesale e-commerce and logistic businesses.
In addition to the cloud revenue, the company also disclosed the completion on migration to a public cloud since the most recent quarter. This move is a crucial milestone for the company as it sets an example for potential customers who will be using public cloud technology.
Daniel Zhang, Alibaba Group chairman, and CEO made the announcement on Thursday during the post-earnings call. “We believe the migration of Alibaba’s core e-commerce system to the public cloud is a watershed event. Not only will we ourselves enjoy greater operating efficiency, but we believe, it will also encourage others to adopt our public cloud infrastructure,” said Zhang.
Alibaba Cloud perceives a strong growth, especially in Asia. As a global cloud operator, the company manages about 20 data center regions, many of which come from Europe and the United States. Its very own e-commerce platform also runs on the cloud, which helped during the busiest shopping day in China, known as 11.11. According to the company, the retailer’s revenue generates more than Black Friday in the United States.
“During 11.11, our public cloud infrastructure and technology helped us to power the creation of over 544,000 orders per second at peak, process 970 petabytes of data without any disruption and defend against six billion cyberattacks—all within a 24-hour period,” stated Zhang.
The CEO also commends Alibaba cloud and said the 11.11 milestone paves the way for accelerated growth of the cloud services.
The company is also preparing for a short setback brought by the ongoing coronavirus outbreak, which presses challenges to its business. The outbreak is already affecting China as a whole, with its economy declining week per week.
Alibaba Group said it will roll out some measures to help affected merchants ride through the epidemic. Aside from the waived service fees, the company will also provide free services for merchants based in the epicenter, Hubei.