Alibaba’s serious entry into the cloud infrastructure sector began in 2015, accompanied by significant aspirations, and the company has demonstrated consistent expansion since then. The Chinese e-commerce leader recently reported quarterly cloud revenue totaling $2.194 billion. This figure allows it to surpass IBM’s $1.65 billion revenue (based on Synergy Research market share data), marking a noteworthy achievement.

Although $2 billion represents a substantial amount, it’s important to view it in context. For instance, Amazon announced $11.6 billion in cloud infrastructure revenue for its latest quarter, while Microsoft’s Azure secured the second position with $5.9 billion.

Google Cloud has maintained its third-place ranking, a position it has held throughout our coverage of the cloud infrastructure market. According to recent Synergy data, Google holds a 9% market share, translating to roughly $2.9 billion in revenue.

While Alibaba still lags behind Google, the latest results solidify its position in fourth place, comfortably ahead of IBM. It appears unlikely that Alibaba will overtake Google in the near future, particularly given Google’s increased focus under CEO Thomas Kurian, but surpassing IBM – a long-standing pillar of enterprise computing – is a remarkable feat for a relatively new competitor.

The 60% growth rate represents a slight improvement over the previous quarter’s 59%, essentially indicating stability, which is challenging to achieve as a company approaches a certain revenue level. During today’s earnings conference call, Daniel Zhang, Chairman and CEO of Alibaba Group, explained that the ongoing digital transformation spurred by the pandemic has been a key driver of consistent growth within China, which remains the company’s core market.

“The cloud business is experiencing rapid expansion. Examining our revenue distribution, it’s clear that cloud is enjoying exceptionally fast growth. We observe that industries across the board are undergoing digital transformation, and migrating to the cloud is a crucial step in this process,” Zhang stated on the call.

He anticipates that the majority of business transactions will eventually occur in the cloud, and believes growth can continue in the medium term, as numerous companies have yet to make the transition but are expected to do so over time.

John Dinsdale, an analyst at Synergy Research, notes that while China is its primary market, the company also has a presence in other regions and can adopt a long-term strategy considering the current geopolitical climate and trade tensions between the U.S. and China.

“Alibaba has already made progress outside of China and Hong Kong. While the scale is considerably smaller compared to its operations in China, Alibaba has established a data center and cloud presence in several countries, including six additional APAC nations, the U.S., the U.K., and the UAE. Within these, it currently leads the market in both Indonesia and Malaysia,” Dinsdale shared with TechCrunch.

Synergy’s most recent data, released a few weeks prior to today’s announcement, detailed the market breakdown as follows: “Amazon 33%, Microsoft 18%, Google 9%, Alibaba 5%, IBM 5%, Salesforce 3%, Tencent 2%, Oracle 2%, NTT 1%, SAP 1% – rounded to the nearest percentage point.”