The move is part of wider investments aimed at growing its European business, with recruitment of sales and support staff also underway. It is early days for Alibaba, but as other recent data centre expansions have shown -- such as those in the US, Australia and the Middle East - China's biggest public cloud provider has ambitions to replicate its success outside of its home country.
"Since last year, we have a strategy to go global," says Yeming Wang, head of Alibaba Cloud Europe, speaking to Computerworld UK recently.
In 2009, Alibaba created its cloud service based on the internal IT capabilities that power its huge ecommerce business, essentially offering its expertise out to customers. Like Amazon Web Services, Microsoft Azure, Google, and others, Alibaba cloud offers a range of basic infrastructure as a service products- compute, storage and so forth - with a focus on providing data analytics to customers.
Since joining the company in the last six months, Wang was tasked with building out the firm's European presence, recruiting staff in London, Paris, and Germany, and building links with systems integrators. He says that Alibaba will prioritise selling to European web-based businesses. "The focus from the very beginning will be on several areas, especially for those industries which are very heavily reliant on the internet," he says.
"For example, the gaming sector and the media sector or digital advertisement or ecommerce. These businesses are very much internet-based and they need big data and cloud services to be agile."
The company is also targeting industrial firms, particularly around the Internet of Things. "Recently, we are talking with some of the automotive companies from Europe to try to talk not only cloud but a total solution of how to provide the connected car or smart solution," Wang says.
Alibaba has already won contracts with large European businesses, including multinational firms Schneider and Philips, with the latter using Alibaba to build out its internet of things platform for Chinese customers.
Wang says that in Europe the company is currently working with two types of "mainstream" clients. One set is "European clients who want to go to China, or go to Asia" and the other is Chinese companies that are expanding their operations in the opposite direction.
Another cloud competitor
So, can Alibaba offer a real alternative to the more established cloud providers vying for the attention of CIOs? There are a number of challenges the company will have to face. One is its product features, with leading cloud providers offering more extensive options for analytics, machine learning and serverless computing functionality (such as AWS Lambda). However, Wang says that the company is creating artificial intelligence tools as part of the cloud platform.
He adds that the main selling points of Alibaba's cloud services are around its big data capabilities and security - which he says has been proven by supporting the ecommerce business' operations for a number of years. "We believe that our solution has several [advantages]," he explains. "The first could be our security solution. As Alibaba internally we are using Alibaba Cloud, because the Alibaba internal business is also our customer."
The company will also face a challenge in convincing CIOs, who have become used to dealing with the likes of AWS and Microsoft for their public cloud requirements. Its decision to set up a data centre in Frankfurt - co-located in a Vodafone facility - along with its rapid growth of data centre locations, should appeal to customers in more regulated industries. But competitors have extensive cloud networks too.
However, it is likely that Alibaba will offer services to European customers at a lower price than its competition. Ultimately, Wang says that the expansion is about offering a greater choice to customers. "Of course there are a lot of different players, no matter if it is AWS, or Microsoft or IBM, but Alibaba offers an alternative choice," he says. "We come to Europe not for competition, not to grab a certain market share from anybody else, but we want to provide a second choice and we have our value proposition and we believe certain clients will value that."