Amazon Web Services (AWS) could be facing stiffer competition in Europe if Alibaba Cloud's talks with BT reach fruition.
Bloomberg reported Monday that BT was in talks with e-commerce giant Alibaba's cloud division in regard to a partnership in Europe that would challenge not only Amazon Web Services' dominance but also boost BT's cloud computing and big data capabilities. A spokeswoman confirmed that BT was in talks with Alibaba Cloud but said there were no additional details at this time.
In a report last month by Synergy Research Group, Alibaba Cloud ranked as the fourth-biggest global provider of cloud infrastructure and services behind, respectively, AWS, Microsoft and Google. Alibaba was ranked second in the APAC region behind AWS.
A partnership with BT could mirror the one that Vodafone and Alibaba Cloud formed two years ago in Germany, according to Bloomberg. Currently, Alibaba has one data center located in Frankfurt, Germany, that allows Vodafone to resell Alibaba's cloud services, such as data storage and analytics.
Alibaba wasn't ranked among the top five cloud providers by Synergy Research in the Europe, Middle East and Africa (EMEA) region, but last week Alibaba Cloud announced its EMEA Ecosystem Partner Program, which was designed to further strengthen collaboration between Alibaba Cloud’s customers across the region.
As part of the same announcement, Alibaba Cloud said it had reached an agreement with France-based Bollore SA to provide cloud computing, big data, security and artificial intelligence applications and services.
Founded in 2009, Alibaba Cloud has moved beyond its Chinese roots by offering infrastructure-as-a-service and public cloud services to businesses worldwide. In the United States, it has data centers in California and Virginia, although Bloomberg reported it scaled back its U.S. operators around the same time that tensions between the U.S. and China started to escalate under the Trump administration.
BT looking to regroup
A partnership with Alibaba Group would be welcome news for BT, which cut its workforce by 7,000 jobs earlier this year. Last month, BT CEO Gavin Patterson lost his job as the company tried to find its footing with its Global Services division. The Global Services division saw its revenue drop 9% last year, which led to BT lowering its financial estimates for the year.
Partnering with Alibaba could increase BT's cloud computing and big data skills as clients move their IT capacity offsite to lower costs, according to Bloomberg. A deal with Alibaba would face scrutiny from U.K. security agencies due to BT being the primary custodian of Britain's nationwide communications network. BT Global Services has cloud-based relationships in place with AWS, Microsoft Azure and Cisco.
Faced with the prospect of losing large enterprise customers to cloud providers, the telecom industry has responded by forging relationships with them. Last year, AT&T announced it had expanded its business cloud network partnership with AWS while earlier this year Verizon picked AWS as its preferred public cloud provider.
Aside from working with their business customers, service providers including Verizon and AT&T are tapping into the cloud to offer cloud-based virtual services, including as a service VNFs, IaaS, Paas and virtual customer premise equipment, to their enterprise customers.