Alibaba Cloud vs. Tencent Cloud
Both Alibaba Cloud and Tencent Cloud use artificial intelligence to develop business solutions. Regarding market dominance, Alibaba Cloud holds a bigger share in both the global and Chinese cloud infrastructure markets than Tencent Cloud; however, it is estimated that Tencent Cloud has 1.08 billion users while Alibaba Cloud has 100 million users. Below we highlight the findings of both companies broken down by ecosystem, data access, and marketing potential including a brief research methodology.
To perform the comparative analyses of both Alibaba Cloud and Tencent Cloud by ecosystem, data access, and marketing potential, we started by preliminary searches to define ecosystem from a marketing perspective, which we found out to be information based on the network of customers, competitors, partnerships, strategies, technology and values to the company. Next, we discovered that some information on the respective companies was not available on their websites; hence, we sought to retrieve such data from external business sources such as Forbes, news sources such as CNBC, other press releases, and reports.
The Alibaba Cloud platform supports endless business and consumer interactions online, locally (China), and internationally facilitated by Alibaba Group's e-commerce platform. It seeks to deploy cloud computing and data management to improve e-commerce, gaming, internet of Things (IoT), and media. Examples of Alibaba Cloud products and services include machine learning, elastic GPU services, and object storage services. Likewise, it offers solutions such as web hosting, e-commerce, gaming, security, and SAP on Alibaba Clouding.
Alibaba’s Cloud business solutions prices vary depending on size. Notably, it supports prepaid, pay-as-you-go, and pay-with-your-face options. Alibaba Cloud helps companies improve their e-commerce, media, and marketing functions. It currently has multiple partnerships with small to large companies and institutions including the International Olympic Committee, which it helps to improve events via data analytics. Alibaba Cloud’s “City Brain, Industrial Brain, and Medical Brain” solutions are specifically designed to assist start-ups in solving problems across industries. Additionally, Alibaba Cloud offers a global start-ups program dubbed Create@Alibaba Cloud currently available throughout mainland China and 12 other countries.
- Data Access
Alibaba Cloud deploys artificial intelligence and machine learning capabilities to assist businesses to retrieve critical data. It offers the ETL option that can handle large scale data, interactive queries, and supports unstructured data processing. Alibaba Cloud is celebrated globally for having helped several businesses and pioneered the "first case of cloud-based quantum-encrypted communication" following a partnership with the “Institute of Quantum Innovation of the Chinese Academy of Science.”
- Marketing Potential
Alibaba Cloud’s market share is rapidly growing following repeated breakthroughs in deploying advanced technologies. The cloud platform allows businesses to process high volume information on sales. In 2016, the platform could support up to 175,000 transactions per second on a Singles' Day shopping event. Alibaba Cloud is ranked fifth in the global cloud market and the largest cloud company in China. As of October 2018, Alibaba Cloud held 4% of the global market share and is expected to reach 7.8% global cloud market share by 2020. The other main competitors in this industry include Alphabet Inc., Amazon Web Services, IBM, and Microsoft Azure. In 2017, Alibaba Cloud users had reached 2.8 million users with 874,000 paying customers. In 2017, Alibaba Cloud generated ¥6.7 billion ($994,816,000 million) accounting for 4% of Alibaba Group revenues. Across the world, Alibaba Cloud covers 19 regions and 56 zones. The platform also offers a payment app – AliPay, with an estimated market share of 53.7%.
Additionally, it features a communication Platform – DingTalk, an all-in-one communication app that enables users to retrieve contacts easily, mobile office toolbox, quality voice/video conference calls, and recognize important messages. Alibaba Cloud claims that the app features high-level security and is available for use on Mac/PC, iOS, and Android. DingTalk uses “DingTalk M2 Smart Receptionist” capable of identifying five faces simultaneously and at a 3-meter distance. In December 2017, DingTalk had accumulated over 100 million users and has gained rapid popularity due to its features such as communication and attendance management, cost, file storage, and high-level security.
Tencent Cloud combines artificial intelligence with high performing technologies to deliver business solutions. Its services are highly customized and feature rich social media involvement along with mobile payment, online video, gaming, and music. Tencent Cloud is regarded as a reputable and robust network with global coverage. It offers products and services such as CDN & acceleration, computing, cloud storage, gaming, domain & websites, AI applications, networking, database TencentDB, big data, security, internet of things (IoT) developer tools, middleware, management tools, retail, data processing, communication, video services, and mobile and data application services.
Tencent Cloud also provides different kinds of partnerships such as “consulting partner, development partner, reseller partner, and service provider. Examples of partners who have used Tencent’s capabilities include NVIDIA, which used GPU sharing VMs, Deloitte, which used its cloud computing and big data services, and Cisco, which used its IT and Internet solutions. Tencent Cloud and Intel are partnering to provide cloud gaming (Tencent Instant Play) on Android and Windows PC. Tencent is the world’s largest gaming company, and in 2018 it earned 29% of its revenue from online games. It also supports WeChat Pay.
- Data Access
Tencent Cloud supports access to consumer data such as behavioral patterns of WeChat users. Additionally, the cloud platform has access to both demographic and psychographic behavioral data and patterns of its users.
- Marketing Potential
Tencent Cloud’s global infrastructure presence spans 24 zones and 16 global regions. In October 2018, it shared a 12% market share along with other competitors including China Telecom, IBM, NTT, Oracle, and Salesforce. Tencent held 11.2% of the Chinese cloud market, which was second to Alibaba Cloud with 43%. Its revenue forecast based on mobile games is anticipated to increase by 17% in 2019, equivalent to $13.6 billion. Due to the intense competition in the market, Tencent Cloud seeks to diversify and focus more on expanding its presence in the cloud computing, entertainment, and digital payments segments. Its other businesses also saw revenue increases in 2018 by 72% or $3.6 billion; however, it had a 32% decline in net income due to high spending.
Video gaming regulations cost the company $127 billion in share value in 2018; however, it has gained almost $40 billion in 2019 indicating a rapid turnaround. In the payments segment, Tencent’s TenPay has a market share of approximately 39.5% in China. It primarily uses WeChat, which has 1.08 billion users as the preferred communication platform. Equally, Moments is the coolest feature on WeChat with 750 million users using the service at least ten times a day. Further, 63 million users are senior citizens. WeChat supports approximately 45 billion messages and 410 million audio/video calls daily. It also allows users to perform different tasks besides communication such as reading news, run mini Programs, make payments, and play games. In closing, WeChat has about 15 or more features.