There is an increased demand in business software due to corona virus outbreak in China. To cater this rising demand, Alibaba Group Holding Ltd (BABA) is planning to invest $28 billion on a three-year cloud infrastructure plan. According to company’s official statement these funds would be utilized for development of its own data center, semiconductors and operating system software.
While China’s leading cloud player reported increased software usage, specially DingTalk, as more companies and educational institutes started working from homes during quarantines. At times most users reported slow service because of high traffic. These problems were acknowledged by the company on a Chinese social network website called as Weibo.
Corona virus has brought extra economical stress across various sectors, said Jeff Zhang, president of cloud Intelligence of the company in an official statement. Moreover, he is of the view that investments would bring speedy recovery to various businesses.
The cloud sector of Alibaba (BABA) is growing faster day by day, for the first time in a single quarter its revenue rose from 10 billion yuan, while its fourth quarter revenue mounted 62 percent to 10.7 billion yuan.
China’s cloud market in the fourth quarter was ruled by the technology giant by 46.4% market share, reported Canalys, a research firm. Other market cloud competitors such as Tencent Cloud and Baidu Cloud had 18% and 8.8% market share, thanks to increase in their product demand.
Alibaba cloud division also helped the government of Hangzhou in developing a system to monitor health. This system is intended to monitor and rate virus exposure using colors such as red, yellow green etc. this health monitoring system was later deployed across the country.
Alibaba (BABA) shares rose nearly 3 percent in the mid-day trading session. The 52-week range of the stock is $147.95 – $231.14, while the company’s market cap is $590.383 billion.
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