Middle East is Latest Stop for Alibaba’s Cloud-computing Arm

Aliyun, Alibaba Group’s cloud-computing business, is continuing its expansion outside its home country of China through a Middle East joint venture with state-owned Dubai holding company Meraas.

Announced today at a signing ceremony in Hangzhou, China, the joint venture with Meraas, which has real estate, asset management and investment divisions, will establish a technology company selling system-integration services to private companies and government organizations in the Middle East and North Africa. Headquartered in Dubai, the joint venture will specialize in application development, citizenship e-services and big-data operations with a special focus on analytics and payment solutions, according to a press release.

Abdulla Al Habbai, group chairman of Meraas, said the JV is “in line with the initiative launched by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, to transform the emirate into a smart city.” He added the new company will offer services that “contribute to the six key pillars including transport, communications, infrastructure, electricity, economic services and urban planning.

“We strongly believe that the new company will alter the information technology landscape of the region,” he said.

Aliyun, China’s largest provider of cloud services, opened its first overseas data center in Silicon Valley in March, marking the company’s first foray outside the mainland. As of June 30, 2014, the company had 1.4 million customers using Aliyun services directly or indirectly through independent software vendors.

“As the world evolves, I believe the information technology era is moving towards the data technology era,” said Alibaba Group Executive Chairman Jack Ma. “Dubai’s advanced infrastructure and economic strength is a good match for our technology edge, and with Meraas we will be able to provide local entrepreneurs with the vital infrastructure that will ignite innovation and help them to succeed,” Ma said in a statement.

Regional spending on information and communication technology is set to surpass $270 billion this year in the Middle East and North Africa, according to an International Data Corporation (IDC) report. IDC said the region’s projected 9 percent growth rate this year is set to be second-fastest of any region in the world.

The JV will also join a high-tech integrated community consisting of a data center, hotels, residential and commercial spaces, retail and restaurants to be developed by Meraas.