Personal blog of Yzmir Ramirez

When you look at the Asia-Pacific (APAC) regional cloud infrastructure numbers, it would be easy to think that one of the Chinese cloud giants, particularly Alibaba, would be the leader in that geography, but new numbers from Synergy Research show Amazon leading across the region overall, which generated $9 billion in revenue in Q2.

The only exception to Amazon’s dominance was in China, where Alibaba leads the way with Tencent and Baidu coming in second and third, respectively. As Synergy’s John Dinsdale points out, China has its own unique market dynamics, and while Amazon leads in other APAC sub-regions, it remains competitive.

“China is a unique market and remains dominated by local companies, but beyond China there is strong competition between a range of global and local companies. Amazon is the leader in four of the five sub-regions, but it is not the market leader in every country,” he explained in a statement.

Image Credits: Synergy Research

The $9 billion in revenue across the region in Q2 represents less than a third of the more than $30 billion generated in the worldwide market in the quarter, but the APAC cloud market is still growing at more than 40% per year. It’s also worth pointing out as a means of comparison that Amazon alone generated more than the entire APAC region, with $10.81 billion in cloud infrastructure revenue in Q2.

While Dinsdale sees room for local vendors to grow, he says that the global nature of the cloud market in general makes it difficult for these players to compete with the largest companies, especially as they try to expand outside their markets.

“The challenge for local players is that in most ways cloud is a truly global market, requiring global presence, leading edge technology, strong brand name and credibility, extremely deep pockets and a long-term focus. For any local cloud companies looking to expand significantly beyond their home market, that is an extremely challenging proposition,” Dinsdale said in a statement.

Research firm Canalys reports that the Chinese cloud infrastructure market grew 66.9% to $3.3 billion in the last quarter of 2019, right before the COVID-19 virus hit the country. China is the second largest cloud infrastructure market in the world, with 10.8% share.

The quarter puts the Chinese market on a $13.2 billion run rate. Canalys pegged the U.S. market at $14 billion for the same time period, with a 47% worldwide market share.

Alibaba led the way in China, with more than 46% market share. Like its American e-commerce giant counterpart, Amazon, Alibaba has a cloud arm, and it dominates in its country much the same way AWS does in the U.S.

Tencent was in second, with 18%, roughly the equivalent of Microsoft Azure’s share in the U.S., and Baidu AI Cloud came in third, with 8.8%, roughly the equivalent of Google’s U.S. market share.

Slide: Canalys

Matthew Ball, an analyst at Canalys, says the fourth quarter numbers predate the medical crisis due to the COVID-19 outbreak in China. “In terms of growth drivers for Q4, we have seen the ongoing demand for on-demand compute and storage accelerate throughout 2019, as private and public organizations embark on digital transformation projects and start building platforms and applications to develop new services.”

Ball says gaming was a big cloud customer, as was healthcare, finance, transport and industry. He also pointed to growth in facial recognition technology as part of the smart city sector.

As for next year, Ball says the firm still sees big growth in the market despite the virus impact in Q12020. “In addition to the continuation of digital projects once business returns to normality, we anticipate many businesses new to using cloud services during the crisis will continue use and become paying customers,” he said. The cloud companies have been offering a number of free options to businesses during the crisis.

“The overall outcome of current events around the world will be that companies will assess their business continuity measures and make sure they can continue to operate if events are ever repeated,” he said.

Sisense, an enterprise startup that has built a business analytics business out of the premise of making big data as accessible as possible to users — whether it be through graphics on mobile or desktop apps, or spoken through Alexa — is announcing a big round of funding today and a large jump in valuation to underscore its traction. The company has picked up $100 million in a growth round of funding that catapults Sisense’s valuation to over $1 billion, funding that it plans to use to continue building out its tech, as well as for sales, marketing and development efforts.

For context, this is a huge jump: The company was valued at only around $325 million in 2016 when it raised a Series E, according to PitchBook. (It did not disclose valuation in 2018, when it raised a venture round of $80 million.) It now has some 2,000 customers, including Tinder, Philips, Nasdaq and the Salvation Army.

This latest round is being led by the high-profile enterprise investor Insight Venture Partners, with Access Industries, Bessemer Venture Partners, Battery Ventures, DFJ Growth and others also participating. The Access investment was made via Claltech in Israel, and it seems that this led to some details of this getting leaked out as rumors in recent days. Insight is in the news today for another big deal: Wearing its private equity hat, the firm acquired Veeam for $5 billion. (And that speaks to a particular kind of trajectory for enterprise companies that the firm backs: Veeam had already been a part of Insight’s venture portfolio.)

Mature enterprise startups have proven their business cases are going to be an ongoing theme in this year’s fundraising stories, and Sisense is part of that theme, with annual recurring revenues of over $100 million speaking to its stability and current strength. The company has also made some key acquisitions to boost its business, such as the acquisition of Periscope Data last year (coincidentally, also for $100 million, I understand).

Its rise also speaks to a different kind of trend in the market: In the wider world of business intelligence, there is an increasing demand for more digestible data in order to better tap advances in data analytics to use it across organizations. This was also one of the big reasons why Salesforce gobbled up Tableau last year for a slightly higher price: $15.7 billion.

Sisense, bringing in both sleek end user products but also a strong theme of harnessing the latest developments in areas like machine learning and AI to crunch the data and order it in the first place, represents a smaller and more fleet of foot alternative for its customers. “We found a way to make accessing data extremely simple, mashing it together in a logical way and embedding it in every logical place,” explained CEO Amir Orad to us in 2018.

“We have enjoyed watching the Sisense momentum in the past 12 months, the traction from its customers as well as from industry leading analysts for the company’s cloud native platform and new AI capabilities. That coupled with seeing more traction and success with leading companies in our portfolio and outside, led us to want to continue and grow our relationship with the company and lead this funding round,” said Jeff Horing, managing director at Insight Venture Partners, in a statement.

To note, Access Industries is an interesting backer which might also potentially shape up to be strategic, given its ownership of Warner Music Group, Alibaba, Facebook, Square, Spotify, Deezer, Snap and Zalando.

“Given our investments in market leading companies across diverse industries, we realize the value in analytics and machine learning and we could not be more excited about Sisense’s trajectory and traction in the market,” added Claltech’s Daniel Shinar in a statement.

Databricks, the big data analytics service founded by the original developers of Apache Spark, today announced that it is bringing its Delta Lake open-source project for building data lakes to the Linux Foundation under an open governance model. The company announced the launch of Delta Lake earlier this year, and, even though it’s still a relatively new project, it has already been adopted by many organizations and has found backing from companies like Intel, Alibaba and Booz Allen Hamilton.

“In 2013, we had a small project where we added SQL to Spark at Databricks […] and donated it to the Apache Foundation,” Databricks CEO and co-founder Ali Ghodsi told me. “Over the years, slowly people have changed how they actually leverage Spark and only in the last year or so it really started to dawn upon us that there’s a new pattern that’s emerging and Spark is being used in a completely different way than maybe we had planned initially.”

This pattern, he said, is that companies are taking all of their data and putting it into data lakes and then doing a couple of things with this data, machine learning and data science being the obvious ones. But they are also doing things that are more traditionally associated with data warehouses, like business intelligence and reporting. The term Ghodsi uses for this kind of usage is “Lake House.” More and more, Databricks is seeing that Spark is being used for this purpose and not just to replace Hadoop and doing ETL (extract, transform, load). “This kind of Lake House patterns we’ve seen emerge more and more and we wanted to double down on it.”

Spark 3.0, which is launching today soon, enables more of these use cases and speeds them up significantly, in addition to the launch of a new feature that enables you to add a pluggable data catalog to Spark.

Delta Lake, Ghodsi said, is essentially the data layer of the Lake House pattern. It brings support for ACID transactions to data lakes, scalable metadata handling and data versioning, for example. All the data is stored in the Apache Parquet format and users can enforce schemas (and change them with relative ease if necessary).

It’s interesting to see Databricks choose the Linux Foundation for this project, given that its roots are in the Apache Foundation. “We’re super excited to partner with them,” Ghodsi said about why the company chose the Linux Foundation. “They run the biggest projects on the planet, including the Linux project but also a lot of cloud projects. The cloud-native stuff is all in the Linux Foundation.”

“Bringing Delta Lake under the neutral home of the Linux Foundation will help the open-source community dependent on the project develop the technology addressing how big data is stored and processed, both on-prem and in the cloud,” said Michael Dolan, VP of Strategic Programs at the Linux Foundation. “The Linux Foundation helps open-source communities leverage an open governance model to enable broad industry contribution and consensus building, which will improve the state of the art for data storage and reliability.”

Alibaba announced its earnings today, and the Chinese e-commerce giant got a nice lift from its cloud business, which grew 66% to more than $1.1 billion, or a run rate surpassing $4 billion.

It’s not exactly on par with Amazon, which reported cloud revenue of $8.381 billion last quarter, more than double Alibaba’s yearly run rate, but it’s been a steady rise for the company, which really began taking the cloud seriously as a side business in 2015.

At that time, Alibaba Cloud’s president Simon Hu boasted to Reuters that his company would overtake Amazon in four years. It is not even close to doing that, but it has done well to get to more than a billion a quarter in just four years.

In fact, in its most recent data for the Asia-Pacific region, Synergy Research, a firm that closely tracks the public cloud market, found that Amazon was still number one overall in the region. Alibaba was first in China, but fourth in the region outside of China, with the market’s Big 3 — Amazon, Microsoft and Google — coming in ahead of it. These numbers were based on Q1 data before today’s numbers were known, but they provide a sense of where the market is in the region.

Synergy’s John Dinsdale says the company’s growth has been impressive, outpacing the market growth rate overall. “Alibaba’s share of the worldwide cloud infrastructure services market was 5% in Q2 — up by almost a percentage point from Q2 of last year, which is a big deal in terms of absolute growth, especially in a market that is growing so rapidly,” Dinsdale told TechCrunch.

He added, “The great majority of its revenue does indeed come from China (and Hong Kong), but it is also making inroads in a range of other APAC country markets — Indonesia, Malaysia, Singapore, India, Australia, Japan and South Korea. While numbers are relatively small, it has also got a foothold in EMEA and some operations in the U.S.”

The company was busy last quarter adding more than 300 new products and features in the period ending June 30th (and reported today). That included changes and updates to core cloud offerings, security, data intelligence and AI applications, according to the company.

While the cloud business still isn’t a serious threat to the industry’s Big Three, especially outside its core Asia-Pacific market, it’s still growing steadily and accounted for almost 7% of Alibaba’s total of $16.74 billion in revenue for the quarter — and that’s not bad at all.

Salesforce, the 20-year-old leader in customer relationship management (CRM) tools, is making a foray into Asia by working with one of the country’s largest tech firms, Alibaba.

Alibaba will be the exclusive provider of Salesforce to enterprise customers in mainland China, Hong Kong, Macau and Taiwan, and Salesforce will become the exclusive enterprise CRM software suite sold by Alibaba, the companies announced on Thursday.

The Chinese internet has for years been dominated by consumer-facing services such as Tencent’s WeChat messenger and Alibaba’s Taobao marketplace, but enterprise software is starting to garner strong interest from businesses and investors. Workflow automation startup Laiye, for example, recently closed a $35 million funding round led by Cathay Innovation, a growth-stage fund that believes “enterprise software is about to grow rapidly” in China.

The partners have something to gain from each other. Alibaba does not have a Salesforce equivalent serving the raft of small-and-medium businesses selling through its e-commerce marketplaces or using its cloud computing services, so the alliance with the American cloud behemoth will fill that gap.

On the other hand, Salesforce will gain sales avenues in China through Alibaba, whose cloud infrastructure and data platform will help the American firm “offer localized solutions and better serve its multinational customers,” said Ken Shen, vice president of Alibaba Cloud Intelligence, in a statement.

“More and more of our multinational customers are asking us to support them wherever they do business around the world. That’s why today Salesforce announced a strategic partnership with Alibaba,” said Salesforce in a statement.

Overall, only about 10% of Salesforce revenues in the three months ended April 30 originated from Asia, compared to 20% from Europe and 70% from the Americas.

Besides gaining client acquisition channels, the tie-up also enables Salesforce to store its China-based data at Alibaba Cloud. China requires all overseas companies to work with a domestic firm in processing and storing data sourced from Chinese users.

“The partnership ensures that customers of Salesforce that have operations in the Greater China area will have exclusive access to a locally-hosted version of Salesforce from Alibaba Cloud, who understands local business, culture and regulations,” an Alibaba spokesperson told TechCrunch.

Cloud has been an important growth vertical at Alibaba and nabbing a heavyweight ally will only strengthen its foothold as China’s biggest cloud service provider. Salesforce made some headway in Asia last December when it set up a $100 million fund to invest in Japanese enterprise startups and the latest partnership with Alibaba will see the San Francisco-based firm actually go after customers in Asia.

Kabbage, the AI-based small business loans platform backed by SoftBank and others, is adding more firepower to its lending machine: the Atlanta-based startup has secured an additional $200 million in the form of a revolving credit facility from an unnamed subsidiary of a large life insurance company, managed and administered by 20 Gates Management, and Atalaya Capital Management.

The money comes on the heels of a $700 million securitization Kabbage secured just three months ago and it is notable not just for its size but its terms: it’s a four-year facility, a length of time that underscores a level of confidence in the company’s performance.

Kabbage, which loans up to $250,000 in a single deal to small and medium businesses, has built a platform that harnesses the long tail of big data from across the web. It uses not just indicators from a company’s own public activities, but also sources comparative information from across a wider group of similar companies, with “2 million live data connections” currently helping to feed its algorithm.

Together, these help Kabbage determine whether to provide the loans, and at what rates. Notably, the whole process takes mere minutes, making Kabbage disruptive to the traditional route of applying for loans from banks, which can come at higher rates, often take longer to close and may never get approved.

The company was last valued at $1.2 billion in its most recent equity round from the Vision Fund in 2017, with about $500 million raised in equity to date from it and other investors, including BlueRun Ventures and Mohr Davidow Ventures. Rob Frohwein, the co-founder and CEO, confirmed to me via email that there are “no plans on the equity side right now.” We’ve asked about IPO plans and will update if we learn anything more on that front.

More importantly, alongside its equity story is the company’s business story: Kabbage has to date loaned out $7 billion in capital — amassed through securitizations and other facilities alongside that — to 185,000 businesses, and the company has seen an acceleration of business activity over the last two years. Nearly $700 million was loaned out in Q2 of this year, passing the record in Q1 of $600 million. This puts Kabbage on track to loan out between $2.4 billion and $3 billion this year.

“This transaction further diversifies Kabbage’s committed sources of funding and prepares us to meet the escalating demand for capital access among small businesses,” said Kabbage head of Capital Markets, Deepesh Jain, in a statement. “2019 has proven to be a tide-shifting year as customers accessed more than $670 million from Kabbage in Q2 2019, well surpassing our previously set record last quarter.”

While a lot of Kabbage’s business has come out of its direct consumer relationships, it’s also been expanding by way of more third-party relationships. It has white-label partnerships with banks to power their own loan offerings for SMBs, and earlier this year it was also tapped by e-commerce giant Alibaba to provide loans to its small business customers of up to $150,000 to help finance purchases, part of the latter company’s redoubled efforts to build out its business in the U.S. by way of its quiet acquisition of OpenSky.

Alibaba has made an acquisition as it continues to square up to the opportunity in enterprise services in China and beyond, akin to what its U.S. counterpart Amazon has done with AWS. TechCrunch has confirmed that the e-commerce and cloud services giant has acquired Teambition, a Microsoft and Tencent-backed platform for co-workers to plan and collaborate on projects, similar to Trello and Asana.

There were rumors of an acquisition circulating yesterday in Chinese media. Alibaba has now confirmed the acquisition to TechCrunch but declined to provide any other details.

Teambition had raised about $17 million in funding since 2013, with investors including Tencent, Microsoft, IDG Capital and Gobi Ventures. Gobi also manages investments on behalf of Alibaba, and that might have been one route to how the two became acquainted. Alibaba’s last acquisition in enterprise was German big data startup Data Artisans for $103 million.

As with others in the project management and collaboration space, Teambition provides users with mobile and desktop apps to interact with the service. In addition to the main planning interface, there is one designed for CRM, called Bingo, as well as a “knowledge base” where businesses can keep extra documentation and other collateral.

The deal is another sign of how Alibaba has been slowly building a business in enterprise powerhouse over the last several years as it races to keep its pole position in the Chinese market, as well as gain a stronger foothold in the wider Asian region and beyond.

In China alone, it has been estimated that enterprise services is a $1 billion opportunity, but with no clear leader at the moment across a range of verticals and segments that fall under that general umbrella, there is a lot to play for, and likely a lot more consolidation to come. (And it’s not the only one: ByteDance — more known for consumer services like TikTok — is rumored to be building a Slack competitor, and Tencent also has its sights on the sector, as does Baidu.)

As with AWS, Alibaba’s enterprise business stems out of the cloud-based infrastructure Alibaba has built for its own e-commerce powerhouse, which it has productised as a service for third parties that it calls Alibaba Cloud, which (like AWS) offers a range of cloud-storage and serving tiers to users.

On top of that, Alibaba has been building and integrating a number of apps and other services that leverage that cloud infrastructure, providing more stickiness for the core service as well as the potential for developing further revenue streams with customers.

These apps and services range from the recently launched “A100” business transformation initiative, where Alibaba proposes working with large companies to digitise and modernize (and help run) their IT backends, through to specific products, such as Alibaba’s Slack competitor DingTalk.

With Alibaba declining to give us any details beyond a confirmation of the acquisition, and Teambition not returning our requests for comment, our best guess is that this app could be a fit in either area. That is to say, one option for Alibaba would be to integrate it and use it as part of a wider “business transformation” and modernization offering, or as a standalone product, as it currently exists.

Teambition today counts a number of Chinese giants, and giants with Chinese outposts, as customers, including Huawei, Xiaomi, TCL and McDonald’s in its customer list. The company currently has nothing on its site indicating an acquisition or any notices regarding future services, so it seems to be business as usual for now.

The opportunity around collaboration and workplace communication has become a very hot area in the last few years, spurred by the general growth of social media in the consumer market and people in business environments wanting to bring in the same kinds of tools to help them get work done. Planning and project management — the area that Teambition and its competitors address — is considered a key pillar in the wider collaboration space alongside cloud services to store and serve files and real-time communication services.

Slack, which is now valued at more than $7 billion, has said it has filed paperwork for a public listing, while Asana is now valued at $1.5 billion and Trello’s owner Atlassian now has a market cap of nearly $26 billion.

The Cloud Native Computing Foundation (CNCF), the open-source home of projects like Kubernetes and Vitess, today announced that its technical committee has voted to bring a new project on board. That project is etcd, the distributed key-value store that was first developed by CoreOS (now owned by Red Hat, which in turn will soon be owned by IBM). Red Hat has now contributed this project to the CNCF.

Etcd, which is written in Go, is already a major component of many Kubernetes deployments, where it functions as a source of truth for coordinating clusters and managing the state of the system. Other open-source projects that use etcd include Cloud Foundry, and companies that use it in production include Alibaba, ING, Pinterest, Uber, The New York Times and Nordstrom.

“Kubernetes and many other projects like Cloud Foundry depend on etcd for reliable data storage. We’re excited to have etcd join CNCF as an incubation project and look forward to cultivating its community by improving its technical documentation, governance and more,” said Chris Aniszczyk, COO of CNCF, in today’s announcement. “Etcd is a fantastic addition to our community of projects.”

Today, etcd has well over 450 contributors and nine maintainers from eight different companies. The fact that it ended up at the CNCF is only logical, given that the foundation is also the host of Kubernetes. With this, the CNCF now plays host to 17 projects that fall under its “incubated technologies” umbrella. In addition to etcd, these include OpenTracing, Fluentd, Linkerd, gRPC, CoreDNS, containerd, rkt, CNI, Jaeger, Notary, TUF, Vitess, NATS Helm, Rook and Harbor. Kubernetes, Prometheus and Envoy have already graduated from this incubation stage.

That’s a lot of projects for one foundation to manage, but the CNCF community is also extraordinarily large. This week alone about 8,000 developers are converging on Seattle for KubeCon/CloudNativeCon, the organization’s biggest event yet, to talk all things containers. It surely helps that the CNCF has managed to bring competitors like AWS, Microsoft, Google, IBM and Oracle under a single roof to collaboratively work on building these new technologies. There is a risk of losing focus here, though, something that happened to the OpenStack project when it went through a similar growth and hype phase. It’ll be interesting to see how the CNCF will manage this as it brings on more projects (with Istio, the increasingly popular service mesh, being a likely candidate for coming over to the CNCF as well).

Google today announced that it is providing the Cloud Native Computing Foundation (CNCF) with $9 million in Google Cloud credits to help further its work on the Kubernetes container orchestrator and that it is handing over operational control of the project to the community. These credits will be split over three years and are meant to cover the infrastructure costs of building, testing and distributing the Kubernetes software.

Why does this matter? Until now, Google hosted virtually all the cloud resources that supported the project, like its CI/CD testing infrastructure, container downloads and DNS services on its cloud. But Google is now taking a step back. With the Kubernetes community reaching a state of maturity, Google is transferring all of this to the community.

Between the testing infrastructure and hosting container downloads, the Kubernetes project regularly runs more than 150,000 containers on 5,000 virtual machines, so the cost of running these systems quickly adds up. The Kubernetes container registry has served almost 130 million downloads since the launch of the project.

It’s also worth noting that the CNCF now includes a wide range of members that typically compete with each other. We’re talking Alibaba Cloud, AWS, Microsoft Azure, Google Cloud, IBM Cloud, Oracle, SAP and VMware, for example. All of these profit from the work of the CNCF and the Kubernetes community. Google doesn’t say so outright, but it’s fair to assume that it wanted others to shoulder some of the burdens of running the Kubernetes infrastructure, too. Similarly, some of the members of the community surely didn’t want to be so closely tied to Google’s infrastructure, either.

“By sharing the operational responsibilities for Kubernetes with contributors to the project, we look forward to seeing the new ideas and efficiencies that all Kubernetes contributors bring to the project operations,” Google Kubernetes Engine product manager William Deniss writes in today’s announcement. He also notes that a number of Google’s will still be involved in running the Kubernetes infrastructure.

“Google’s significant financial donation to the Kubernetes community will help ensure that the project’s constant pace of innovation and broad adoption continue unabated,” said Dan Kohn, the executive director of the CNCF. “We’re thrilled to see Google Cloud transfer management of the Kubernetes testing and infrastructure projects into contributors’ hands — making the project not just open source, but openly managed, by an open community.”

It’s unclear whether the project plans to take some of the Google-hosted infrastructure and move it to another cloud, but it could definitely do so — and other cloud providers could step up and offer similar credits, too.