When Jack Ma, the former CEO of Alibaba, passed the torch to Daniel Zhang, he set up a system regular rotation of executive officers to ensure the company stays agile in the rapidly changing internet space. It’s time to reshuffle this year — the e-commerce and cloud giant created a some major overhaul announcements on Thursday.
The standout decision is taking place at Alibaba Cloud, the third-largest public cloud infrastructure provider in the world behind only AWS and Microsoft. Jeff Zhang, former president of Alibaba Cloud Intelligence, will step down while Daniel Zhang (not related), CEO of Alibaba, takes over as acting chairman.
The timing of the restructuring is sparking speculation. Just under two weeks ago, Alibaba Cloud’s servers in Hong Kong experienced a severe outage that shut down many services in the region, including major crypto exchange OKX. System crashes lasting up to 1 day for some customers caused problems one of the biggest among Chinese cloud providers in recent history.
Jeff is not leaving, but will instead focus his attention on Alibaba’s Damo Academy for fundamental research. Is one of 29 members of Alibaba Partnership, a group of exclusive executives With a major influence on the direction of the company, Zhang has played an important role since he joined two decades ago. First, he was instrumental in designing the system infrastructure for Taobao, one of the world’s largest online marketplaces.
At Damo, he will continue to be in charge of IoT initiatives, and T-Head, Alibaba’s proprietary chip development team, has taken on new importance as China navigates the escalation. technology sanctions from the US
“For the past four years, Jeff has led the Alibaba Cloud Intelligence team to deliver outstanding results in terms of technology innovation and industry impact,” Daniel said in an internal email to employees.
In addition to taking control of the cloud business, the CEO will also manage DingTalk, Alibaba’s business communication app that works closely with the cloud unit. Like us wrote in 2020:
At this week’s annual summit, Alibaba Cloud reiterated its latest strategy to “cloud integration into Dingtalk (in Chinese)”, its work collaboration app is similar to Slack.
The tagline shows the strategic role Alibaba wants Dingtalk to play: an operating system built on Alibaba Cloud, the world’s cloud platform. third largest infrastructure as a service behind Amazon and Microsoft. It is a relationship that repeats the relationship between Microsoft 365 and Azure, as Alibaba Cloud president Zhang Jianfeng previously suggested in a blog post. interview (in China).
It’s hard to imagine Daniel being dedicated to the cloud business in the long run, which is probably why he received the title of acting president. Being the second largest enterprise of Alibaba, accounting for 10% of total revenue in Q2the cloud segment will definitely have a hard time finding the next right boss.
Regardless of who succeeds, it will not be a small feat. The cloud arm is experiencing sluggish growth in recent quarters as it loses key overseas income streams. Alibaba Cloud used to be the go-to solution for many Chinese internet companies to expand overseas, but with geopolitical tensions rising, they are turning to foreign providers like AWS to cut ties with China. Country. Case in point, Alibaba Cloud report made a big splash after TikTok moved data out of its service.
As the company commented in its own words on November earnings call:
“Revenue from customers in [the] the internet industry declined by about 18%, mainly due to declining revenue from leading internet customers who have gradually stopped using our overseas cloud services for international business, online education customers, etc. online, as well as reduced demand from other customers in the Chinese internet industry.”
Domestically, Alibaba Cloud faces competition from arch nemesis Tencent, which has a strong gaming edge. It is also competing with Huawei and Tianyi, the cloud arm of state-owned telecom giant China Telecom, both of which are at the forefront of supporting government and public infrastructure.