When Alibaba’s former CEO Jack Ma handed the torch to Daniel Zhang, he established a system that recurrently rotates executives to make sure the corporate at all times stays agile within the fast-changing web area. It’s time for this yr’s reshuffle — the e-commerce and cloud computing titan made a few main reshuffle bulletins on Thursday.
The choice that stands out is occurring at Alibaba Cloud, the third-largest public cloud infrastructure supplier on the earth solely after AWS and Microsoft. Jeff Zhang, former president of Alibaba Cloud Intelligence, is stepping down whereas Daniel Zhang (unrelated), Alibaba’s CEO, takes over as performing president.
The timing of the restructuring is sparking hypothesis. Slightly below two weeks in the past, Alibaba Cloud’s Hong Kong servers suffered a critical outage that shut down many providers within the area, together with main crypto change OKX. The system failure, which lasted as much as in the future for some prospects, made the incident one of many largest amongst Chinese language cloud suppliers in latest historical past.
Jeff isn’t gone however will as a substitute focus his consideration on Alibaba’s primary analysis institute Damo Academy. As one of many 29 members of Alibaba Partnerships, a gaggle of unique executives with main affect on the agency’s route, Zhang has performed a pivotal position since he joined 20 years in the past. For one, he was instrumental in designing the system infrastructure for Taobao, one of many world’s largest on-line marketplaces.
At Damo, he’ll proceed to be answerable for IoT initiatives and Alibaba’s proprietary chip improvement crew T-Head, which has assumed new significance as China navigates escalating tech sanctions from the U.S.
“Over the previous 4 years, Jeff has led the Alibaba Cloud Intelligence crew to ship excellent leads to technological innovation and business affect,” stated Daniel in an inner electronic mail to employees.
Other than taking the helm of the cloud enterprise, the CEO can even be managing DingTalk, Alibaba’s enterprise communication app that works carefully with the cloud unit. As we wrote in 2020:
At its annual summit this week, Alibaba Cloud reiterated its newest technique to “combine cloud into Dingtalk (in Chinese language),” its work collaboration app that’s analogous to Slack.
The slogan suggests the strategic position Alibaba needs Dingtalk to play: an working system constructed on Alibaba Cloud, the world’s third-largest infrastructure as a service behind Amazon and Microsoft. It’s a relationship that echoes the one between Microsoft 365 and Azure, as president of Alibaba Cloud Zhang Jianfeng beforehand steered in an interview (in Chinese language).
It’s exhausting to think about Daniel being devoted to the cloud enterprise over the long run, which might be why he’s getting the performing president title. Because the second-biggest enterprise of Alibaba accounting for 10% of total revenues in Q2, the cloud phase will certainly exit of its strategy to discover the subsequent appropriate boss.
Whoever the successor is, it gained’t be a small feat. The cloud arm is experiencing sluggish development in latest quarters because it loses essential sources of abroad earnings. Alibaba Cloud was as soon as the go-to resolution for a lot of Chinese language web companies increasing overseas, however with rising geopolitical tensions, they’re turning to international suppliers like AWS to sever ties with China. Living proof, Alibaba Cloud reportedly took a giant hit after TikTok moved its information off its service.
As the corporate remarked in its personal phrases on its November earnings name:
“Income from prospects in [the] web business declined about 18% that was primarily pushed by declining income from the highest web buyer that has step by step stopped utilizing our abroad cloud service for its worldwide enterprise, on-line training prospects, in addition to softening demand from different prospects in China web business.”
Domestically, Alibaba Cloud faces rivalry from its nemesis Tencent, which has a stronghold in video games. It’s additionally competing with Huawei and Tianyi, the cloud offshoot of state telecom big China Telecom, each of that are getting a headstart in supporting authorities and public infrastructure.
