Alibaba to Help Create Cloud City, Jack Ma Says it's the Future [Updated]

(This article has been updated to add comments from Jack Ma)

Alibaba Cloud Computing, the cloud computing subsidiary of Alibaba Group, and the Hainan International Tourism Island Pilot Zone, a district in the touristy Chinese island of Hainan, have a signed a strategic agreement that will see RMB 5 billion ($815 million) invested into the area to make it into a cloud computing and big data “intelligent city.”

Under the agreement, Alibaba Cloud Computing will provide Hainan’s local government, residents and tourists cloud computing and big data services, said an Alibaba Group press release. Alibaba Cloud Computing will also build e-government and urban management platforms in order to digitize some public services. Alipay, the e-payment affiliate of Alibaba Group, committed to provide online payment services to consumers and residents on Hainan, as well as O2O payment solutions to the island’s businesses.

Alibaba officials did not say how much the company was investing in the project under the agreement.

“We are going through a time of change,” said Jack Ma, Alibaba Group’s executive chairman, during a Feb. 27 signing ceremony. “Consumption patterns are changing, lifestyles are changing and business infrastructure is changing. In five years, we anticipate that the human era will move from the information technology era to the data technology era.”

Ma said in a Feb 28 internal memo to staff that he believes the next 10 years will bring great opportunity in the areas of cloud and mobile computing and that it is Alibaba’s 10-year goal to create data technology infrastructure to support modern and rapidly developing Chinese businesses. Ma said the point of data technology is to use big data to generate value and increase the richness of experiences for users. Data technology encompasses cloud computing, e-commerce and mobile, all of which are strategic areas for Alibaba.

“Mobile commerce will be the most important area of focus in the era of the mobile Internet,” said Ma. "Our goal for this decade is to create data technology era and data technology infrastructure in order to support the growth of Chinese businesses".

Alibaba Group will also move the headquarters of its digital entertainment and gaming business unit to Hainan’s pilot zone and open a branch of its Taobao University in the area.

Alibaba Cloud Computing, which provides data storage and cloud services to millions of online shops operating on Alibaba Group shopping websites Taobao Marketplace and Tmall.com, has been pushing into the financial services and government sectors. In December, Alibaba Cloud Computing was awarded the world’s first gold certification for cloud security by the British Standards Institute.