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Alibaba Cloud services become strong IaaS contender

Alibaba continues to gain traction in the IaaS market, and despite not having the same breadth of services as some of its rivals, it could lure some smaller shops away from AWS.

While AWS, Microsoft Azure and Google Cloud Platform are often pegged as the "Big Three" public cloud platforms, there's a dark horse in the race -- Alibaba Cloud -- that intrigues some enterprise buyers.

According to data that Gartner released last year, Alibaba Cloud surpassed Google in worldwide infrastructure as a service (IaaS) market share in 2016, and in terms of revenue growth, Alibaba Cloud sales exploded 126.5% to $675 million, up from $298 million in 2015.

Alibaba Cloud services' clientele is largely China-based, but that economy alone could propel the product upward.

Alibaba vs. AWS

The elevator pitch for Alibaba Cloud is simple: It provides core IaaS services, such as compute, networking and storage, including an object storage service, similar to Amazon S3, and table storage. The platform also provides some higher-end services, like the ability to run Docker containers. In addition, database services, including ApsaraDB for Relational Database Service, MongoDB and Redis -- which are also similar to AWS offerings -- are available.

Many smaller enterprises are perfectly fine with just the basics -- if the price is right -- and that is where Alibaba Cloud services could come in.

While it might not be entirely fair to call Alibaba Cloud a stripped-down version of AWS, it's not too far off the mark. AWS has hundreds of core infrastructure and higher-end platform services, such as those related to machine learning and the internet of things. However, Alibaba seems content to provide just the basics.

And many smaller enterprises are perfectly fine with just the basics -- if the price is right -- and that is where Alibaba Cloud services could come in.

Because of the many compute options available, it's difficult to perform an apples-to-apples comparison of AWS and Alibaba Cloud pricing; whichever provider is more cost-effective for you is really an "it depends" scenario.

For example, according to a price comparison study by CloudBerry Lab, a provider of cross-platform cloud backup services, an AWS EC2 Linux t2.small instance with one CPU and 2 GB of memory would cost $16.84 per month for on-demand pricing and 100% utilization, or $10.51 per month as a Reserved Instance. A Linux instance with one CPU and 2 GB of memory on Alibaba Cloud costs $19 per month with a monthly subscription.

Here, AWS appears to be the cheaper option; however, that's only if you need compute capacity. That AWS instance pricing does not include storage, while the Alibaba Cloud instance comes with 40 GB of solid-state drive storage.

Before you deem one of these providers more cost-effective than the other, be sure to determine what your costs would be, based on the exact resources you need and how you plan to consume them.

Home advantage

Alibaba has its ace in the hole: China. It understands both the culture and the laws better than all of the top IaaS cloud players, and that market is likely as large as Europe.

But that advantage could work against the company outside of China, where trust could be more of an issue. Most U.S.- and Europe-based companies over $10 billion that value brand recognition are not likely to move to Alibaba Cloud anytime soon. Still, Alibaba continues to move aggressively into the U.S. and will most likely target SMBs, many of which are current AWS users that might be unhappy with their cloud bill.

Ultimately, the value of Alibaba Cloud services is similar to discount airlines. They might not provide all the services you get from the major carriers -- or go to all of the places you need to go -- but they keep the bigger players honest and the costs down.

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