Alibaba Cloud mulls launching Israel operations

Alibaba Cloud Photo:  Reuters, Sun Xinming

The Chinese tech giant is considering joining Amazon Web Services, Google, Microsoft and Oracle in Israel's fast growing data centers market.

Alibaba Cloud is considering deploying its infrastructure in Israel, sources close to the matter have told "Globes." From when any decision is taken it will take Alibaba Cloud about 18 months to set up a national infrastructure for Israeli customers. The Chinese company was considering the economic feasibility of this move several years ago but the outbreak of the Covid pandemic suspended plans and now the target date for launching services should Alibaba Cloud decide to go ahead is 2024.

Alibaba would be the last of the world's major cloud players to launch in Israel. Oracle opened a data center in Jerusalem earlier this month and is planning a second. Microsoft and Google will launch data centers in Israel next year and Amazon Web Services (AWS) will launch three data centers in Israel by 2023. By then the US giants sales staff are likely to have signed on all Israel's biggest customers including government ministries, defense organizations, banks, insurance companies and telecoms.

Without building a data center

Alibaba is not expected to build its own data center in Israel as Amazon is doing but rather to be hosted at one of the large data centers currently being built in Israel by companies such as SDS, KKR, Med One, Global Data Center and Farm.

Market experts do not expect Alibaba's cloud operations in Israel to exceed 4 MW in the coming years. Microsoft, for example, plans 22 MW of operations, Google 16 MW, and AWS 32 MW.

Alibaba Cloud was not interested in competing for the Israeli government's Nimbus data storage tender because the close relations between Israel and the US would not have allowed the tender to have been awarded to a Chinese company. However, Alibaba Cloud is interested in gaining a foothold in the Israeli market as part of its global expansion. Last year, Alibaba Cloud said that it would invest $28 billion in global expansion over the next three years.

Alibaba declined to comment on the report.

Published by Globes, Israel business news - en.globes.co.il - on October 24, 2021.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2021.

Alibaba Cloud Photo:  Reuters, Sun Xinming
Alibaba Cloud Photo: Reuters, Sun Xinming
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