Globalization Via The Cloud This Way Comes

When most business executives in North America think about globalization and IT their thought process generally focuses on the opportunities technologies such as cloud computing can afford them in terms of breaking into new markets. After all, the cloud reduces the cost of entry into those markets by allowing them to take advantage of pre-existing IT infrastructure.

Of course, what many of them fail to notice is that when it comes to globalization the cloud cuts both ways. Many companies in Asia, for example, are going to ride the cloud to more expand their operations into North America.

Looking to help companies in the U.S. and China seize those opportunities, Aliyun, the cloud computing arm of Alibaba Group that serves over 1.4 million customers in China, announced it has signed an agreement with Equinix (EQUIX) under which the global online retailer will provide private connections to its data centers in Hong Kong and one that is under development in Santa Clara, California.

Alibaba CEO Jack Ma this week is on a recruiting mission to convince companies in the United States that the online e-commerce platform provider that rivals Amazon in terms of both size and scope is the perfect conduit for cracking a Chinese market where billions of consumers regularly buy almost every imaginable product or service on line. In fact, Cisco (CSCO) recently forecasted that Asia will soon become the largest cloud computing market in terms of the amount of traffic generated by 2018.

Alibaba also has global ambitions to unseat both Amazon in North America and the JD.com online retail platform managed by Tencent Group in Europe. In fact, much like Amazon has leveraged its IT investment in e-commerce to create a massive cloud computing platform, solution providers should expect to see the same cloud computing phenomenon playing out around Aliyun. As the number of companies looking to leverage Aliyun to break into new markets increases, the same type IT ecosystem that has emerged around Amazon Web Services (AWS) should also manifest itself around Aliyun.

Chris Sharp, vice president of cloud innovation for Equinix, said that growth in global commerce should not only fuel demand for direct connections to Aliyun data centers specifically, but also Internet peering exchange services that minimize network latency issues between globally distributed e-commerce applications.

Fresh off of launching a formal channel program, Equinix is clearly looking for partners to help fuel that international growth in e-commerce transactions. Of course, it’s not the only provider of Internet peering exchange services with similar ambitions. Demand for all those private connections should create a wealth of opportunities at a level of scale that is about to dwarf anything seen in the cloud to date.