After lowering prices across the board in China a month ago, Alibaba Cloud has once again brought the “price war” overseas.
On April 8th, Alibaba Cloud announced price reductions in overseas markets, covering core cloud products deployed in 13 global regions and over 500 product specifications. The average price reduction is 23%, with the highest reaching up to 65%. Following this price adjustment, Alibaba Cloud’s overseas market cloud product prices are now lower than those of other international mainstream cloud vendors.
This price adjustment mainly targets Malaysia, Indonesia, Singapore, the Philippines, Japan, South Korea, Thailand, the United States (East Coast and West Coast), Germany, the United Kingdom, the United Arab Emirates and Hong Kong SAR of China. It involves five main categories of products: computing, storage, networking, databases and big data.
Among them, the maximum reduction for cloud servers ECS is 30%, block storage EBS has a maximum reduction of 59%, big data products have a maximum reduction of 50%, object storage OSS adds a discount of 500GB for new and existing users to share, package prices have been reduced from $63 to $16.99, cloud data transfer CDT public network traffic free quota has been increased from 20GB/month to 200GB/month, and the maximum reduction for cloud database RDS is up to 50%.
In addition to price reductions, Alibaba Cloud has launched a series of new products and ecosystem incentive policies for overseas markets to accelerate its expansion. The new products mainly target AI training inference and application development, such as PAI Lingjun intelligent computing service and large model hosting service. This policy increases partner commission rates and increases investment in building a localized service system.
Yuan Qian, President of Alibaba Cloud Intelligence International Business Unit, stated that the world is currently at a crucial moment of transformation from traditional computing to AI computing, with the vast majority of AI computing taking place on public cloud platforms.
Currently, Alibaba Cloud’s new products in overseas markets are mainly focused on the field of AI. Among them, PAI Lingjun intelligent computing service is said to achieve up to 96% linear acceleration ratio in ultra-large-scale training through distributed scheduling and compilation, and has now been launched in Singapore. In the training and application of large models such as Tongyi Qianwen, this service improves the efficiency of large model training and inference.
The company has also launched a large-scale hosting service, with products covering various development stages such as data annotation, model training, version control, performance monitoring, etc. In addition, there are sustainable development solutions such as the Energy Treasure OpenAPI service, which includes carbon microservices and energy microservices.
Along with the price reduction, value-added services have been introduced: upon meeting the minimum purchase quantity requirement, subscribing to one year of cloud services will entitle you to 3 months of TAM (Technical Account Manager) service for free; subscribing to three years of cloud services will grant you one year of TAM service. The TAM refers to an exclusive technical service manager whose services include technical support, emergency response for core business modules’ anomalies and standard solution support in the field of architecture stability.
This price reduction is another significant decrease by Alibaba Cloud in the domestic market following the overall price reduction on February 29. In the domestic market, Alibaba Cloud previously announced an average price reduction of 20% for over 100 products and more than 500 product specifications on its official website, with a maximum discount of 55%. The prices of core products are close to being the lowest across all platforms.
SEE ALSO: Alibaba Cloud Announces the Largest Price Reduction in History
When talking about the reasons for price reduction, Liu Weiguang, Senior Vice President of Alibaba Cloud Intelligence Group and President of Public Cloud Business Unit, previously stated that price reduction is not a short-term market competition behavior, but a long-term strategic choice determined by the business model of public cloud.
He mentioned that cloud computing is a business model with network effects and economies of scale. Alibaba Cloud mainly provides a reusable global cloud computing network and resource pool. The more customers use it, the lower the supply chain procurement costs, average research and development costs, and idle resource costs will be reduced continuously, and product prices will also become cheaper.
But price reductions will inevitably intensify the competition among cloud computing vendors for enterprise customers.
According to the latest global cloud computing market share rankings released by Synergy Research Group in February, Amazon still ranks first with a market share of 31%, followed by Microsoft Azure with a 24% share and Google Cloud with an 11% share. Alibaba Cloud holds a 4% share, ranking fourth, while Tencent Cloud, IBM, and Oracle are tied at 2%.
Alibaba Cloud and Tencent Cloud have both expanded into overseas markets and gained a certain market share. However, the majority of their overseas customers are domestic entrepreneurs who operate international websites or engage in cross-border e-commerce. Compared to international giants like Amazon and Microsoft, these two companies still have a significant gap.
Alibaba Cloud has opened 89 availability zones in 30 regions worldwide, serving over 5 million customers from more than 200 countries and regions. This price reduction will undoubtedly help Alibaba Cloud attract more price-sensitive customers, thereby gaining a larger share from Amazon, Microsoft, and Google.
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