Alibaba Cloud Adds CloudBox and Other Options to Deliver Services Closer to Data Sources

S. Soh

Summary Bullets:

• Alibaba Cloud has products to extend its services from major cloud data centers to customer premises and edge locations.

• The company needs to make these products more widely available outside of China and work with communications service providers (CSPs) to deliver multi-access edge computing (MEC).

As enterprises look to leverage cloud services to embed digital solutions (e.g., data analytics, AI/ML, IoT, etc.) in their business operations, there are specific requirements for their IT infrastructure. While public cloud infrastructure-as-a-service (IaaS) offers agility and cost-effectiveness, there are challenges around the availability of a cloud region, network latency issues, and security/compliance requirements. Moreover, applications are moving from centralized locations (i.e., cloud or data centers) to a more distributed architecture, giving rise to the demand for edge computing. Hyperscalers have been developing alternatives to host their cloud services, and Alibaba Cloud – as a key player – has also been helping customers to bring cloud services closer to where the data is generated and processed.

In developing its business in Asia, Alibaba Cloud has been adding data centers including Manila (the Philippines) in 2021, as well as Bangkok (Thailand) and Seoul (South Korea) in 2022. This is crucial in many ways; for example, the data center in Bangkok helps enterprises in Thailand address data residency and compliance requirements. This is even more critical with the Personal Data Protection Act coming into force on June 1, 2022. Alibaba Cloud also recognizes the need to extend its cloud services closer to customers and support a distributed cloud architecture. In China, the company has deployed Local Regions in some Tier 2 cities to serve customers with a smaller set of cloud services. A full region can be put in place when the market matures and there is sufficient scale. This is similar to Amazon Web Services’ (AWS) approach with its Local Zones, which also started in the US. To support hybrid cloud, Alibaba Cloud also offers a private cloud option – Aspara Stack – that customers can deploy in their data center and manage on their own. However, as cloud providers have discovered, there are still gaps between the public cloud data centers (e.g., availability, network latency, etc.) and private cloud (e.g., scalability, agility, etc.).

Alibaba Cloud announced its CloudBox solution during Alibaba Cloud Summit in September 2022. CloudBox extends public cloud services to customer premises, which will counter competing products such as AWS Outposts. While it does not offer the full range of Alibaba Cloud products and services, it does support 15 key products including compute, storage, and network with fully managed services. CloudBox has been introduced in mainland China for about a year, and the solution is now ready for the international stage, starting with the Hong Kong (China) market. In addition, Alibaba Cloud offers Dedicated Cloud Region (DCR) for customers in highly regulated industries (e.g., the financial services sector) with data residency and compliance requirements. DCR supports more products than CloudBox but also delivers scalability. This is also a fully managed service and provides consistency in terms of performance and user experience. Lastly, the company also offers Edge Node Service, which provides scalable computing, network, and storage resources at the edge of nodes of internet service providers (ISPs). Alibaba Cloud has more than 2,800 edge nodes (500 internationally) that it can leverage to support this service.

With these different options, Alibaba Cloud is able to match the offerings from other hyperscalers in the Asia-Pacific region. However, the availability of CloudBox and Local Regions remains limited. CloudBox is an attractive option for sensitive workloads (i.e., data and latency), and it complements existing services customers consume from the company’s cloud region. Local Regions can also be deployed in smaller cities across Asia or to test out new markets (e.g., Vietnam). Competing cloud providers are also working with CSPs to embed edge computing with 5G mobile. This can be useful especially for industries such as manufacturing, resources, healthcare, etc. to transform their business operations (e.g., robotics, visual inspection, remote health, etc.).

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