Date
26 September 2017
Over 100 Chinese financial institutions are said to have flocked to Alibaba Cloud Computing following a cyber-spying row between the US and China. Photo: Alibaba
Over 100 Chinese financial institutions are said to have flocked to Alibaba Cloud Computing following a cyber-spying row between the US and China. Photo: Alibaba

US-China spying row helps Alibaba cloud unit

With the US and Chinese authorities engaging in a fresh war of words over cyber-espionage, some mainland firms have begun to benefit as companies seek out local enterprises for data storage and other services. Among those reaping a windfall is Alibaba Group.

Over 100 Chinese financial institutions have run into the arms of Alibaba Cloud Computing or Aliyun, as they seek to avoid the ‘IOE’, or server services providers IBM, Oracle and EMC, due to security reasons.

China Bohai Bank and Donghai Bank are among the financial firms that have started using Alibaba services, according to Economic Information Daily.

And it’s not only the small and mid-sized banks that are interested in the IT services provided by Alibaba Cloud Computing. Many big financial institutions which initially had doubts about Alibaba’s technology are now more willing to adopt the platform provided. Some of them are now said to be in talks with Alibaba about moving their data to the latter’s facilities.

Alibaba Cloud Computing said it plans to provide services to more than 2,000 banks, brokerages, insurance companies and funds in the future.

For many local financial institutions, Alibaba’s cloud computing services makes it around 70 percent cheaper when compared to using foreign service providers like IBM and Oracle, according to Shanghai Securities Times.

More importantly, Alibaba has gained considerable experience in handling financial transaction data since it launched its Alipay business around ten years ago.

Alibaba should thank the US for expanding its cloud system business.

The confrontation between the US and China has been escalating over the past month as both sides accuse the each other of stealing government and commercial secrets.

The US has charged five Chinese military officers for hacking into American companies to steal trade secrets. One of the companies which claimed its confidential business information was being stolen is SolarWorld.

In showing its discontent and objection, China first excluded Microsoft’s latest operating system Windows 8 from its procurement in new government computers, a move which was explained as ensuring computer security.

Beijing then asked Chinese banks to replace IBM servers with local brand alternatives as part of a trial program, according to mainland media. Also, some state-owned companies indicated that they will cease working with US consulting companies like McKinsey and Boston Consulting Group due to fears that they are spying on behalf of the US government.

How the US responds to Beijing’s retaliatory moves will be interesting to watch. But no matter what happens, Alibaba’s cloud unit has already secured the big break it needs.

–- Contact the writer at [email protected]

RC

EJ Insight writer

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