Alibaba to cut cloud prices by nearly 50% to accelerate market share

Alibaba Cloud has announced it will slash prices for cloud services by nearly 50% as the Chinese tech giant embarks on a drive to expand its market share.

Price changes outlined on Alibaba Cloud’s website show that costs for elastic computing services leveraging Arm and Intel chips will decrease by 15% to 20%. 

Similarly, services which rely on Nvidia-based V100 and T4 graphics processors will also see a price decrease of between 41% to 47%.

The move from Alibaba Cloud comes amid a period of intense competition in the APAC cloud computing space, with a number of Chinese competitors vying for an increased market share.

Alongside Tencent and Huawei, Alibaba Cloud has rapidly expanded its footprint across Southeast Asia in recent months. 

In September, the tech giant announced plans to invest around $1 billion to support its expansion in the region. 

In November last year, Huawei also confirmed that it planned to invest $300 million in expanding cloud operations in Indonesia as it looks to build on an increasing foothold in the region. 

The firm currently provides services in both Thailand and Malaysia. 

However, competition with China-based providers is not the only consideration for Alibaba amid this current period of expansion.

Increasingly, hyperscalers such as Microsoft, AWS, and Google have sought to broaden their own service offerings in the region. 

In March, AWS announced plans to invest $6 billion and create a new infrastructure region in Malaysia. 

This hefty investment followed a previous commitment from AWS in October 2022 in which it unveiled plans to establish a new Asia Pacific (Bangkok) region and invest $5 billion. 

Google Cloud has also been targeting a greater foothold in the APAC region, launching a new Thailand-based unit in August last year.

Pricing out the competition 

Alibaba’s latest price reduction follows a long-running trend among Chinese cloud providers in the APAC region. 

Analysis from the Wall Street Journal earlier this year found that Chinese cloud companies frequently offer prices between 20% to 40% lower than American providers to undercut competition. 

Alibaba’s fresh move could further differentiate the provider from both domestic and international competitors and provide a springboard for greater expansion.